The Jason Manufacturing Company has two production departments (millwright and assembly) and three service departments (general factory administration, factory maintenance, and factory development). A summary of costs and other data for each department, prior to allocation of service department costs for the year ended March 30, appears below. The costs of the general factory administration department, factory maintenance department, and factory development department are allocated on the basis of direct labor hours, square footage occupied, and number of employees, respectively. Assuming that Jason elects to use the sequential method to distribute service department costs (starting with factory development), what would be the amount of factory development that would be allocated to the factory maintenance department?

Question

The Jason Manufacturing Company has two production departments (millwright and assembly) and three service departments (general factory administration, factory maintenance, and factory development). A summary of costs and other data for each department, prior to allocation of service department costs for the year ended March 30, appears below. The costs of the general factory administration department, factory maintenance department, and factory development department are allocated on the basis of direct labor hours, square footage occupied, and number of employees, respectively.  Assuming that Jason elects to use the sequential method to distribute service department costs (starting with factory development), what would be the amount of factory development that would be allocated to the factory maintenance department?

Quizplus · Accepted Answer

Factory Development allocates its costs based on the number of employees.
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The Jason Manufacturing Company Has Two Production Departments (Millwright and Assembly)