Hanung Corp has two service departments, Maintenance and Personnel. Maintenance Department costs of $360,000 are allocated on the basis of budgeted maintenance-hours. Personnel Department costs of $110,000 are allocated based on the number of employees. The costs of operating departments A and B are $188,000 and $282,000, respectively. Data on budgeted maintenance-hours and number of employees are as follows:
Production
Support DepartmentsDepartments

Using the direct method, what amount of Maintenance Department costs will be allocated to Department B? (Do not round any intermediary calculations.)
A) $100,398
B) $128,168
C) $87,742
D) $167,330

Question

Hanung Corp has two service departments, Maintenance and Personnel. Maintenance Department costs of $360,000 are allocated on the basis of budgeted maintenance-hours. Personnel Department costs of $110,000 are allocated based on the number of employees. The costs of operating departments A and B are $188,000 and $282,000, respectively. Data on budgeted maintenance-hours and number of employees are as follows:
Production
Support DepartmentsDepartments

Using the direct method, what amount of Maintenance Department costs will be allocated to Department B? (Do not round any intermediary calculations.)
A) $100,398 
B) $128,168 
C) $87,742 
D) $167,330

Quizplus · Accepted Answer

Maintenance Department costs allocated to Department B = 680 / (680 + 1230) × $360,000 = $128,168

Hanung Corp Has Two Service Departments, Maintenance and Personnel