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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