University Printers has two service departments (Maintenance and Personnel) and two operating departments (Printing and Developing). Management has decided to allocate maintenance costs on the basis of machine-hours in each department and personnel costs on the basis of labor-hours worked by the employees in each. The following data appear in the company records for the current period: Maintenance Printing 1,400 Personnel Developing Machine-hours 1,400 4,200 Labor-hours 800 800 3,200 $10,700 Department direct costs $2,400 $12,400 $13,400 Required: Use the direct method to allocate these service department costs to the operating departments.
Process Costing
Process costing is a sort of operation costing which is employed to determine the value of a product at each process or stage of producing process, applicable where goods produced from a series of continuous operations or procedure.
Job Costing
Job costing is adhesive costs of each and every job involved in the production processes. It is an accounting measure. It is a method which determines the cost of specific jobs, which are performed according to the consumer’s specifications. Job costing is possible only in businesses where the production is done as per the customer’s requirement. For example, some customers order to manufacture furniture as per their needs.
ABC Costing
Cost Accounting is a form of managerial accounting that helps the company in assessing the total variable cost so as to compute the cost of production. Cost accounting is generally used by the management so as to ensure better decision-making. In comparison to financial accounting, cost accounting has to follow a set standard ad can be used flexibly by the management as per their needs. The types of Cost Accounting include – Lean Accounting, Standard Costing, Marginal Costing and Activity Based Costing.
![University Printers has two service departments (Maintenance and Personnel) and two operating
departments (Printing and Developing). Management has decided to allocate maintenance costs on
the basis of machine-hours in each department and personnel costs on the basis of labor-hours
worked by the employees in each.
The following data appear in the company records for the current period:
Printing
1,400
Maintenance
Developing
4,200
3,200
$10,700
Personnel
Machine-hours
1,400
Labor-hours
800
800
Department direct costs
$2,400
$12,400
$13,400
Required:
Use the direct method to allocate these service department costs to the operating departments.
(Negative amounts should be indicated by a minus sign. Do not round intermediate calculations.)
Maintenance
Personnel
Printing
Developing
Service department costs
$
2,400 $ 12,400
Maintenance allocation
(2,400)
Personnel allocation
Total costs allocated
$
$ 12,400
$](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fb00e4a4c-3aad-4309-9995-d1f174bfd3b8%2F26b1c34f-e462-4e90-be63-7a6f611515ff%2Fdb6ae5n_processed.png&w=3840&q=75)
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