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7 7. Jake's Battery Company has two service departments, Maintenance and Personnel. Maintenance Department costs of $160,000 are allocated on the basis of budgeted maintenance-hours.
7 7. Jake's Battery Company has two service departments, Maintenance and Personnel. Maintenance Department costs of $160,000 are allocated on the basis of budgeted maintenance-hours. Personnel Department costs of $40,000 are allocated based on the number of employees. The costs of operating departments A and B are $80,000 and $120,000, respectively, Data on budgeted maintenance-bours and number of employees are as follows: Support Departments Production Departments Maintenance Personnel A B Department Department Budgeted costs $160,000 $40,000 $80,000 $120,000 400 NA 480 320 Budgeted maintenance-hours 20 NA 80 240 Number of employees Using the direct method, what amount of Maintenance Department costs will be allocated to Department A? A. $48,000 B. $64,000 C. 578,000 D. 596,000
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