Brownley Company has two service departments and two operating (production) departments. The Payroll Department services all...

Brownley Company has two service departments and two operating (production) departments. The Payroll Department services all three of the other departments in proportion to the number of employees in each. The Maintenance Department costs are allocated to the two operating departments in proportion to the floor space used by each. Listed below are the operating data for the current period:

	Service Depts.				Production Depts.
	Payroll		Maintenance		Milling		Assembly
Direct costs	$	24,200	$	35,000	$	95,500	$	143,400
No. of personnel				34		34		102
Sq. ft. of space						13,800		18,800

The total cost of operating the Milling Department for the current period is (Do not round your intermediate calculations):

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Expert Solution

Answer

The total cost of operating the Milling Department for the current period is $ 117,204.79.

Calculations:

	Payroll	Maintainence	Milling	Assembly
Direct costs	$ 24,200.00	$ 35,000.00	$ 95,500.00	$ 143,400.00
Payroll	$ (24,200.00)	$ 4,840.00	$ 4,840.00	$ 14,520.00
Total	$ -	$ 39,840.00	$ 100,340.00	$ 157,920.00
Maintainence		$ (39,840.00)	$ 16,864.79	$ 22,975.21
Total	$ -	$ -	$ 117,204.79	$ 180,895.21

Formulae:

	Payroll	Maintenance	Milling	Assembly
Direct costs	24200	35000	95500	143400
Payroll	-24200	=24200/170*34	=24200/170*34	=24200/170*102
Maintenance		-39840	=39840/32600*13800	=39840/32600*18800

In case of any doubt, please comment.

ekkarill92 answered 1 year ago

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