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ABC Corp has two service departments, Maintenance and Personnel. Maintenance Department costs of $300,000 are allocated on the basis of budgeted maintenance-hours. Personnel Department costs
ABC Corp has two service departments, Maintenance and Personnel. Maintenance Department costs of $300,000 are allocated on the basis of budgeted maintenance-hours. Personnel Department costs of $170,000 are allocated based on the number of employees. The costs of operating departments A and B are $188,000 and $282,000, respectively. Data on budgeted maintenance-hours and number of employees are as follows: Maintenance $300,000 NA Personnel $170,000 30% A $188,000 20% B $282,000 % Departments Budgeted costs Budgeted maintenance hours Number of employees 25% NA 25% 50% Required: Allocate the two support departments to the operation departments using reciprocal method
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