Question

Hanung corp has two service departments, maintenance and personnel. Maintenance department costs of $300,000 are allocated on the basis of budgeted maintenance-hours. Personnel department costs of $100,000 are allocated based on the number of employees. The costs of operating departments a and b are $160,000 and $240,000, respectively. Data on budgeted maintenance-hours and number of employees are as follows: support departments production departments maintenance department personnel department a b budgeted costs $300,000 $100,000 $160,000 $240,000 budgeted maintenance-hours na 800 1,200 600 number of employees 50 na 200 600 using the step-down method, what amount of maintenance department cost will be allocated to department b if the service department with the highest percentage of interdepartmental support service is allocated first? (round up)

Answer 1

,Hanung corp has two service departments, maintenance and personnel. Maintenance department costs of $300,000 are allocated on the basis of budgeted maintenance-hours. Personnel department costs of $100,000 are allocated based on the number of employees. The costs of operating departments a and b are $160,000 and $240,000, respectively. Data on budgeted maintenance-hours and number of employees are as follows: support departments production departments maintenance department personnel department a b budgeted costs $300,000 $100,000 $160,000 $240,000 budgeted maintenance-hours na 800 1,200 600 number of employees 50 na 200 600 using the step-down method, amount of maintenance department cost will be allocated to department b if the service department with the highest percentage of interdepartmental support service is allocated first(round up) is $ 345566700