Hanung Corp has two service departments,Maintenance and Personnel.Maintenance Department costs of $350,000 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 $184,000 and $276,000,respectively.Data on budgeted maintenance-hours and number of employees are as follows:

Using the step-down method,what amount of Maintenance Department cost will be allocated to Department A if the service department with the highest percentage of interdepartmental support service is allocated first? (Do not round any intermediary calculations. )

Question

Hanung Corp has two service departments,Maintenance and Personnel.Maintenance Department costs of $350,000 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 $184,000 and $276,000,respectively.Data on budgeted maintenance-hours and number of employees are as follows:

Using the step-down method,what amount of Maintenance Department cost will be allocated to Department A if the service department with the highest percentage of interdepartmental support service is allocated first? (Do not round any intermediary calculations. )

Quizplus · Accepted Answer

Maintenance provides the greatest amount of service to support departments,so it is allocated first.
Dept A: 1230 / (840 + 1230 + 630)× $350,000 = $159,444

Hanung Corp Has Two Service Departments,Maintenance and Personnel