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Exercise 11-29 (Static) Cost Allocation: Direct Method (LO 11-2) University Printers has two service departments (Maintenance and Personnel) and two operating departments (Printing and Developing).
Exercise 11-29 (Static) Cost Allocation: Direct Method (LO 11-2) University Printers has two service departments (Maintenance and Personnel) and two operating departments (Printing and Developing). Management has decided to allocate maintenance costs on the basis of machine-hours in each department and personnel costs on the basis of labor-hours worked by the employees in each. The following data appear in the company records for the current period: Maintenance Personnel 1,000 Machine-hours Labor-hours Department direct costs Printing 1,000 500 $ 15,000 Developing 3,000 2,000 $10,000 500 $5,000 $ 12,000 Required: Use the direct method to allocate these service department costs to the operating departments. (Negative amounts should be indicated by a minus sign. Do not round intermediate calculations.) Maintenance Personnel Printing Developing $ 5,000 $ 12,000 Service department costs Maintenance allocation (5,000) Personnel allocation (13,000) $ (1,000) Total costs allocated $ 0 $ 0 $ 0
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