The Hsu Manufacturing Company has two service departments:
Maintenance and Accounting. The Maintenance Department's costs of
$792,000 are allocated on the basis of machine hours. The
Accounting Department's costs of $171,600 are allocated on the
basis of the number of employees within a specific department. The
direct departmental costs for A and B are $250,000 and $450,000,
respectively.
Maintenance | Accounting | A | B | |
Machine hours | 590 | 100 | 3,600 | 360 |
Number of employees | 2 | 2 | 8 | 4 |
What is the Maintenance Department's cost allocated to Department A
using the direct method?
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