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Evaluating Allocation Bases and Direct Method Allocations Brahtz Company has two service departments, Maintenance and Information Technology (IT), that serve two producing departments, Mixing and
Evaluating Allocation Bases and Direct Method Allocations Brahtz Company has two service departments, Maintenance and Information Technology (IT), that serve two producing departments, Mixing and Packaging. The following data have been collected for these departments for the current year: IT $336,000 Direct department costs Number of employees Number of ethernet connections Number of maintenance hours used Number of maintenance orders Maintenance Mixing Packaging $296,000 $1,920,000 $880,000 40 20 50 30 1,500 1,000 120 180 Required Using the direct method, allocate the service department costs under the following independent assumptions: 1. IT costs are allocated based on the number of employees, and Maintenance costs are allocated based on the number of maintenance hours used. Note: Round your final answers below to the nearest whole dollar. Note: Do not round the rates used in your calculations. IT Costs Mixing Total Packaging 0 $ 0 $ Allocated costs $ 0 Mixing Total Maintenance Costs Allocated costs Packaging 0 $ 0 $ $ 0 2. IT costs are allocated based on the number of ethernet connections served, and Maintenance costs are allocated based on the number of maintenance orders. Note: Round your final answers below to the nearest whole dollar. Note: Do not round the rates used in your calculations. Total IT Costs Allocated costs $ Mixing Packaging 0 $ 0 $ 0 Total Maintenance Costs Allocated costs Mixing Packaging 0 $ 0 $ $ 0
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