Andy Corp. has two service departments and two operating departments. The company allocates service departmental costs...

	Service Departments		Operating Departments
	Personnel	Maintenance	Assembly	Machining
Departmental costs	$144,000	$84,000	$12,000	$34,000
Number of employees	35	30	90	60
Machine-hours	0	0	210	290

Personnel costs are allocated first on the basis of number of employees and Maintenance costs are allocated second on the basis of machine-hours.

Q:) What is the total service department costs allocated to Machining Department?

A:) $ ______?

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Expert Solution

Requirement:
Total Service Department cost allocated to Machining Department = $ 48000 + 62640 = $ 110,640

	Personnel	Maintenance	Assembly	Machining
Departmental cost	$144,000	$84,000	$12,000	$34,000
Allocation:
Personnel (30 + 90+60 = 180)	($144,000)	$24,000	$72,000	*$48,000*
Maintenance ( 210 + 290 = 500)		($108,000)	$45,360	*$62,640*
Total Cost after allocation	$0	$0	$129,360	$144,640

--Working

	Personnel	Maintenance	Assembly	Machining
Departmental cost	144000	84000	12000	34000
Allocation:
Personnel (30 + 90+60 = 180)	-144000	=144000*30/180	=144000*90/180	=144000*60/180
Maintenance ( 210 + 290 = 500)		=-84000-24000	=108000*210/500	=108000*290/500

ekkarill92 answered 1 year ago

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