Allocate maintenance costs based on maintenance hours

Reference no: EM13902725

Allocating overhead. Cameron Company has two production departments and a main- tenance department. In addition, the company keeps other costs for the general lant in a separate account. The estimated cost data for Year 1 follow:

Cost	Production Dept.1	Production Dept. 2	Maintenance	General_Plant
Direct Labor	$100,000	$ 60,000	---	---
Indirect Labor	56,000	28,000	$45,000	$40,000
Indirect Materials	18,000	14,000	1,800	16,000
Miscellaneous	6,000	10,000	3,200	10,000
	$180,000	$112,000	$50,000	$66,000
Maintenance	16,000 Hours	24,000 Hours	---	---

The general plant services the three departments in the following proportions: 50 percent (Department 1); 30 percent (Department 2); 20 percent (Maintenance). Allocate maintenance costs based on maintenance hours.

Allocate maintenance department and general plant costs to the production departments.

Use the step method, starting with general plant costs.

Reference no: EM13902725

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