Morris Manufacturing Company has two support departments,Maintenance Department and Personnel Department,and two producing departments,X and Y.The Maintenance Department costs of $30,000 are allocated on the basis of standard service hours used.The Personnel Department costs of $4,500 are allocated on the basis of number of employees.The direct costs of Departments X and Y are $9,000 and $15,000,respectively. Data on standard service hours and number of employees are as follows:
$\begin{array}{lcccc}
& \text { Maint. } & \text { Person. } & \text { Dept. } & \text { Dept } \
& \underline{\text { Dept. }} & \underline{\text { Dept. }} & \underline{\mathbf{X}} & \underline{\mathbf{Y}} \
\text { Standard service hours used } & 100 & 75 & 600 & 300 \
\text { Number of employees } & 50 & 100 & 150 & 150 \
\text { Dirert lahnur houre }& 125 & 125 & 500 & 250
\end{array}$

- What are the total overhead costs associated with Department X after allocating the Maintenance and Personnel Departments using the direct method?

Question

Morris Manufacturing Company has two support departments,Maintenance Department and Personnel Department,and two producing departments,X and Y.The Maintenance Department costs of $30,000 are allocated on the basis of standard service hours used.The Personnel Department costs of $4,500 are allocated on the basis of number of employees.The direct costs of Departments X and Y are $9,000 and $15,000,respectively. Data on standard service hours and number of employees are as follows:
$\begin{array}{lcccc} 
& \text { Maint. } & \text { Person. } & \text { Dept. } & \text { Dept } \
& \underline{\text { Dept. }} & \underline{\text { Dept. }} & \underline{\mathbf{X}} & \underline{\mathbf{Y}} \
\text { Standard service hours used } & 100 & 75 & 600 & 300 \
\text { Number of employees }  & 50 & 100 & 150 & 150 \
\text { Dirert lahnur houre }& 125 & 125 & 500 & 250
\end{array}$

- What are the total overhead costs associated with Department X after allocating the Maintenance and Personnel Departments using the direct method?

Quizplus · Accepted Answer

The total overhead costs associated with Department X after allocating the Maintenance and Personnel Departments using the direct method are calculated as follows:1. Allocation of Maintenance Department Costs:- Total standard service hours used by all departments: 100 (Maint.) + 75 (Person.) + 600 (X) + 300 (Y) = 1075 hours- Department X's share of Maintenance Department costs: ($30,000 / 1075 hours) * 600 hours = $16,744.19 (approx.)2. Allocation of Personnel Department Costs:- Total number of employees in all departments: 50 (Maint.) + 100 (Person.) + 150 (X) + 150 (Y) = 450 employees- Department X's share of Personnel Department costs: ($4,500 / 450 employees) * 150 employees = $1,5003. Total overhead costs for Department X:- Direct costs of Department X: $9,000- Allocated Maintenance Department costs: $16,744.19 (approx.)- Allocated Personnel Department costs: $1,500- Total: $9,000 + $16,744.19 + $1,500 ≈ $27,244.19However, none of the provided options exactly match the calculated total. Given the options, the closest and most logical choice based on the calculation method would be $29,000, but this does not align with the calculation. It seems there might be a misunderstanding or misinterpretation in the calculation process or the options provided. Based on the standard method of allocation and the data provided, a precise calculation cannot yield any of the given options exactly. The explanation provided is based on the standard allocation method, but the final answer does not match due to possible discrepancies in the calculation or the options given.

Morris Manufacturing Company Has Two Support Departments,Maintenance Department and Personnel