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Annapolis Company has two service departments (Computer Operations & Maintenance Services). Annapolis has two production departments...

Annapolis Company has two service departments (Computer Operations & Maintenance Services). Annapolis has two production departments (Mixing Department & Packaging Department.) Annapolis uses a direct allocation method where service departments are allocated only to production departments. All allocations are based on total employees. Computer Operations has costs of $145,000 and Maintenance Services has costs of $130,000 before any allocations. What amount of Maintenance Services total cost is allocated to the Packaging Department? (round to closest whole dollar) Employees are:

            Computer Operations 3

            Maintenance Services 3

Mixing Department 7

Packaging Department 6

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Annapolis
Direct Method Operations Maintenance Mixing Packaging Total
Number of Employees                       7.00                   6.00                 13.00
Number of Employees % 53.85% 46.15% 100.00%
Total costs       145,000.00       130,000.00       275,000.00
Maintenance cost to be allocated- Number of Employees %      (130,000.00)             70,000.00         60,000.00                        -  
$ 60,000 of Maintenance Services total cost is allocated to the Packaging Department.

ekkarill92 answered 1 year ago
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