Question
Delta Entreprise has two service departments, Maintenance and Personnel. The Maintenance Department's costs of $319898 are allocated to the other departments on the basis of
Delta Entreprise has two service departments, Maintenance and Personnel. The Maintenance Department's costs of $319898 are allocated to the other departments on the basis of budgeted maintenance-hours and the Personnel Department's costs of $190208 are allocated to the other departments based on the number of employees. The costs of the operating departments, A and B, are $200,000 and $300,000, respectively. Data on the budgeted maintenance-hours and the number of employees are as follows:
Maintenance DepartmentPersonnel DepartmentABBudgeted costs$319898$190208$200,000$300,000Budgeted maintenance-hoursNA
807
1204
629
Number of employees65NA280630Calculate the amount of the Maintenance Department's costs that will be allocated to the operating department, Department A, if the direct method of cost allocation is used by Delta Enterprise.
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