Question
Hanung 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
Hanung 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 $100,000 are allocated based on the number of employees. The costs of operating departments A and B are $160,000 and $240,000, respectively. Data on budgeted maintenance-hours and number of employees are as follows:
| Support Departments | Production Departments |
| ||
| Maintenance Department | Personnel Department | A | B | |
Budgeted costs | $300,000 | $100,000 | $160,000 | $240,000 | |
Budgeted maintenance-hours | NA | 800 | 1,200 | 600 | |
Number of employees | 50 | NA | 200 | 600 | |
4) Using the direct method, what amount of Maintenance Department costs will be allocated to Department B?
A) $96,000
*B) $100,000
C) $110,000
D) $122,000
5) Using the direct method, what amount of Personnel Department costs will be allocated to Department B? $75,000
6) Using the step-down method, what amount of Maintenance Department cost will be allocated to Department B if the service department with the highest percentage of interdepartmental support service is allocated first? (Round up)
A) $84,143
B) $69,231
C) $66,734
D) $71,443
7) Using the direct method, what amount of Maintenance Department costs will be allocated to Department A?
8) Using the direct method, what amount of Personnel Department costs will be allocated to Department A?
A) $25,000
B) $28,000
C) $30,000
D) $20,000
9) Using the step-down method, what amount of Maintenance Department cost will be allocated to Department A if the service department with the highest percentage of interdepartmental support service is allocated first? (Round up)
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