Parker Manufacturing has two production departments: Assembly and Packaging. Assembly has 150 employees and occupies 15,000 ft2. Packaging has 50 employees and occupies 10,000 ft2. Monthly indirect costs are: supervision costs of $400,000 and utilities of $75,000. Supervision costs are allocated based on number of employees. Calculate the supervision costs allocated to each department.

Parker Manufacturing has two production departments: Assembly and Packaging. Assembly has 150 employees and occupies 15,000 ft2. Packaging has 50 employees and occupies 10,000 ft2. Monthly indirect costs are: supervision costs of $400,000 and utilities of $75,000. Supervision costs are allocated based on number of employees. Calculate the supervision costs allocated to each department.

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter7: Allocating Costs Of Support Departments And Joint Products

Section: Chapter Questions

Problem 28E: Minor Co. has a job order cost system and applies overhead based on departmental rates. Service...

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