Chapter 9 Performance Evaluation in Decentralized Organizations Create a spreadsheet that shows the allocation of costs AP-GALO for division A and division B Ruby Company has two support departments - Maintenance and power. These departments provide services to the two manufacturing departments - Division A and Division B. Ruby Company uses the direct method to allocate support department costs to the manufacturing divisions based on the number of service hours. The following is a summary of the planned level of activities for the past year. Division A Division B Total Hours Total Fixed Costs Maintenance - 900 1.800 2,700 $125,000.00 Power 23,000 14,000 37.000 $215,000.00 For example, Maintenance planned on supplying 900 hours of service to Division A and 1,800 hours of service to Division B. The total fixed costs in Maintenance and Power were $125,000 and $215,000, respectively. Ruby Company allocates the fixed costs of the support departments using the planned level of activity. The following is a summary of the actual level of activity for the past year. Variable Division A Division B Total Hours Total Cost Maintenance 1,200 1.400 2,600 $85,000.00 Power 22,000 16,000 38.000 560,000.00 For example, Power provided 22,000 hours of service to Division A and 16,000 hours of service to Division B. The total variable costs in Maintenance and Power were $85.000 and 560,000, respectively. Ruby Company allocates the variable costs of the support departments using the actual level of activity Allocate the support costs to Division A and Division 3 using the direct method. Division A Division B Total Cost 41666.67 45769.23 Maintenance Fixed Costs Variable Costs Total Power Fixed Costs Variable Costs Total Grand Total 81351.35 34736.84 249282.93 235717.07