Hanung Corp has two service departments, Maintenance and Personnel. Maintenance Department costs of $310,000 are allocated on the basis of budgeted maintenance-hours. Personnel Department costs of $190,000 are allocated based on the number of employees. The costs of operating departments A and B are $200,000 and $300,000, 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 A? (Do not round any intermediary calculations.)
A) $145,277
B) $334,211
C) $133,684
D) $207,211

Question

Hanung Corp has two service departments, Maintenance and Personnel. Maintenance Department costs of $310,000 are allocated on the basis of budgeted maintenance-hours. Personnel Department costs of $190,000 are allocated based on the number of employees. The costs of operating departments A and B are $200,000 and $300,000, 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 A? (Do not round any intermediary calculations.)
A) $145,277 
B) $334,211 
C) $133,684 
D) $207,211

Quizplus · Accepted Answer

Maintenance Department costs allocated to Department A = 1270 / (630 + 1270) × $310,000 = $207,211

Hanung Corp Has Two Service Departments, Maintenance and Personnel