San Juan Minerals (SJM) has two service departments and two operating departments. Operating data for these departments for last year are as follows: Costs of the Maintenance Department are allocated on the basis of machine hours. Cafeteria costs are allocated on the basis of number of employees. San Juan Minerals does not distinguish between variable and fixed overhead costs.Assuming that San Juan Minerals allocates service department costs using the direct method, the total cost allocated from Maintenance to Processing would be closest to:
A) $21,600
B) $18,783
C) $26,400
D) $20,571

Question

San Juan Minerals (SJM) has two service departments and two operating departments. Operating data for these departments for last year are as follows:  Costs of the Maintenance Department are allocated on the basis of machine hours. Cafeteria costs are allocated on the basis of number of employees. San Juan Minerals does not distinguish between variable and fixed overhead costs.Assuming that San Juan Minerals allocates service department costs using the direct method, the total cost allocated from Maintenance to Processing would be closest to:
A) $21,600 
B) $18,783 
C) $26,400 
D) $20,571

Quizplus · Accepted Answer

The Answer of San Juan Minerals (SJM) has two service departments and two operating departments. Operating data for these departments for last year are as follows:  Costs of the Maintenance Department are allocated on the basis of machine hours. Cafeteria costs are allocated on the basis of number of employees. San Juan Minerals does not distinguish between variable and fixed overhead costs.Assuming that San Juan Minerals allocates service department costs using the direct method, the total cost allocated from Maintenance to Processing would be closest to:
A) $21,600 
B) $18,783 
C) $26,400 
D) $20,571

San Juan Minerals (SJM) Has Two Service Departments and Two