Question

The Hsu Manufacturing Company has two service departments: Maintenance and Accounting. The Maintenance Department's costs of...

The Hsu Manufacturing Company has two service departments: Maintenance and Accounting. The Maintenance Department's costs of $449,500 are allocated on the basis of machine hours. The Accounting Department's costs of $138,000 are allocated on the basis of the number of employees within a specific department. The direct departmental costs for A and B are $350,000 and $550,000, respectively.

Maintenance Accounting A B
Machine hours 675 45 2,850 250
Number of employees 2 2 8 4


What is the Maintenance Department's cost allocated to Department B (rounded to the nearest whole dollar) using the step method and assuming the Maintenance Department's costs are allocated first?

Multiple Choice

  • $35,731.

  • $413,250.

  • $367,250.

  • $459,250.

Business   Accounting   
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Answer #1

The answer has been presented in the supporting sheet. For detailed answer refer to the supporting sheet. For detailed answer refer to the supporting sheet.

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