Garfield Company has two production departments and a maintenance department.In addition,the company keeps other costs for the general plant in a separate account.The estimated cost data for Year 1 follow:

The general plant services the three departments in the following proportions: 50 percent (Department 1);30 percent (Department 2);20 percent (Maintenance).
Required:
Allocate maintenance costs based on maintenance hours.Allocate maintenance department and general plant costs to the production departments.Use the step method,starting with general plant costs.

Question

Garfield Company has two production departments and a maintenance department.In addition,the company keeps other costs for the general plant in a separate account.The estimated cost data for Year 1 follow:
  
The general plant services the three departments in the following proportions: 50 percent (Department 1);30 percent (Department 2);20 percent (Maintenance).
Required:
Allocate maintenance costs based on maintenance hours.Allocate maintenance department and general plant costs to the production departments.Use the step method,starting with general plant costs.

Quizplus · Accepted Answer

The Answer of Garfield Company has two production departments and a maintenance department.In addition,the company keeps other costs for the general plant in a separate account.The estimated cost data for Year 1 follow:
  
The general plant services the three departments in the following proportions: 50 percent (Department 1);30 percent (Department 2);20 percent (Maintenance).
Required:
Allocate maintenance costs based on maintenance hours.Allocate maintenance department and general plant costs to the production departments.Use the step method,starting with general plant costs.

Garfield Company Has Two Production Departments and a Maintenance Department