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 | — | 1,400 | 1,400 | 4,200 | ||||||||
| Labor-hours | 900 | — | 900 | 3,600 | ||||||||
| Department direct costs | $ | 6,000 | $ | 16,000 | $ | 17,500 | $ | 14,700 | ||||
Required:
Allocate the service department costs using the step method, starting with the Maintenance Department. (Negative amounts should be indicated by a minus sign. Do not round intermediate calculations.)
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| University Printers | |||||
| Step Method | Maintenance | Personnel | Printing | Developing | Total |
| Machine hours | 1,400.00 | 1,400.00 | 4,200.00 | 7,000.00 | |
| Machine hours % | 20.00% | 20.00% | 60.00% | 100.00% | |
| Department costs | 6,000.00 | 16,000.00 | 17,500.00 | 14,700.00 | 54,200.00 |
| Maintenance cost to be allocated- Machine hours % | (6,000.00) | 1,200.00 | 1,200.00 | 3,600.00 | - |
| Total cost after allocation | - | 17,200.00 | 18,700.00 | 18,300.00 | 54,200.00 |
| Labor hours | 900.00 | 3,600.00 | 4,500.00 | ||
| Labor hours % | 20.00% | 80.00% | 100.00% | ||
| Maintenance 1 cost to be allocated- Labor Hours % | - | (17,200.00) | 3,440.00 | 13,760.00 | - |
| Total cost allocated | - | - | 22,140.00 | 32,060.00 | 54,200.00 |
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