The following information pertains to Utter Company: Utter Company does not divide costs into fixed and variable components.Personnel costs are allocated based on the number of employees,and maintenance costs are allocated based on machine hours.
Predetermined overhead rates for fabrication and assembly are based on direct labour hours.
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What is the amount of maintenance costs allocated to the Assembly Department using the direct method (rounded to the nearest dollar)?

Question

The following information pertains to Utter Company:  Utter Company does not divide costs into fixed and variable components.Personnel costs are allocated based on the number of employees,and maintenance costs are allocated based on machine hours.
Predetermined overhead rates for fabrication and assembly are based on direct labour hours.
-
What is the amount of maintenance costs allocated to the Assembly Department using the direct method (rounded to the nearest dollar)?

Quizplus · Accepted Answer

The direct method allocates service department costs directly to production departments. Without specific data, the choice is based on typical allocation patterns.

The Following Information Pertains to Utter Company: Utter Company