Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Jackman Industries has two service departments, maintenance and power, and two operating departments, production and assembly. Management has decided to allocate maintenance costs on the
Jackman Industries has two service departments, maintenance and power, and two operating departments, production and assembly. Management has decided to allocate maintenance costs on the basis of direct-labor hours in each department and power costs on the basis of machine hours. The following data were experienced by the company in the current period:
Maintenance | Power | Production | Assembly | ||||||||||||||||
Direct labor hours | 0 | 400 | 4,000 | 2,000 | |||||||||||||||
Machine hours | 2,000 | 0 | 8,400 | 1,600 | |||||||||||||||
Department direct costs | $ | 9,000 | $ | 20,000 | $ | 70,000 | $ | 50,000 |
What is the total service cost allocated to the production department during the period if the direct method of cost allocation is used?
$ 9,200 $22,800 $19,625 None of these. $ 6,200
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started