Grimwood Corporation's Maintenance Department provides services to the company's two operating divisions--the Paints Division and the Stains Division. The variable costs of the Maintenance Department are budgeted based on the number of cases produced by the operating departments. The fixed costs of the Maintenance Department are determined by the number of cases produced by the operating departments during the peak-period. Data appear below:

-How much Maintenance Department cost should be allocated to the Stains Division at the end of the year?

Question

Grimwood Corporation's Maintenance Department provides services to the company's two operating divisions--the Paints Division and the Stains Division. The variable costs of the Maintenance Department are budgeted based on the number of cases produced by the operating departments. The fixed costs of the Maintenance Department are determined by the number of cases produced by the operating departments during the peak-period. Data appear below:

-How much Maintenance Department cost should be allocated to the Stains Division at the end of the year?

Quizplus · Accepted Answer

The correct allocation of the Maintenance Department cost to the Stains Division is $858,220, as determined by the company's cost allocation method.

Grimwood Corporation's Maintenance Department Provides Services to the Company's Two