Cost allocation-direct method

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Reference no: EM13550273

Cost Allocation: Direct Method       

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

Personnel

Printing

Developing

Machine-hours

-

1,000

1,000

3,000

Labor-hours

500

-

500

2,000

Department direct costs

$15,000

$36,000

$45,000

$30,000

Required

Use the direct method to allocate these service department costs to the operating departments.

Reference no: EM13550273

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