question archive A company has 2 service departments, Maintenance and Administration, and 2 operating departments (Department 1 and 2 for simplicity)
A company has 2 service departments, Maintenance and Administration, and 2 operating departments (Department 1 and 2 for simplicity)
Subject:AccountingPrice: Bought3
A company has 2 service departments, Maintenance and Administration, and 2 operating departments (Department 1 and 2 for simplicity). The costs of the maintenance department are allocated based on the machine hours used. For the administration department, the cost allocation is based on the number of staff. The following information is provided: SERVICE DEPARTMENTS PRODUCTION DEPARTMENTS Maintenance Administration Assembly Finishing Costs $ 8.000 $ 4,000 $ 32,000 $36.000 Machine hours used 1,000 hours 2,000 hours 1,500 hours 2,500 hours # of staff 100 staff 200 staff 250 staff 150 staff Required: Allocate the service departments cost to the production departments using the reciprocal method.
