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Magnificent manufacturing has a cleaning department and a maintenance department that provide services to three operations departments (machining, assembly and finishing). The cleaning department's costs
Magnificent manufacturing has a cleaning department and a maintenance department that provide services to three operations departments (machining, assembly and finishing). The cleaning department's costs are allocated based on floor space and the maintenance department's costs are allocated based on number of machines. The company uses the direct method for allocating support department costs.
Cleaning | Maintenance | Machining | Assembly | Finishing | |
Budgeted overhead costs ($) | 375,000 | 367,500 | |||
Allocation basis | Space (sq m) | No. of machines | |||
Space (sq m) | 2,000 | 3,500 | 15,000 | 35,000 | 25,000 |
No. of machines | 5 | 10 | 28 | 52 | 25 |
Using the information in the above table, calculate the amount of overhead that is allocated from the Cleaning department to the Finishing department.
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