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Oaks Company has two support departments, Maintenance Department (MD) and Personnel Department (PD), and two producing departments, P1 and P2 The Maintenance Department costs of
Oaks Company has two support departments, Maintenance Department (MD) and Personnel Department (PD), and two producing departments, P1 and P2 The Maintenance Department costs of $30,000 are allocated on the basis of machine hours used. The Personnel Department costs of $4,500 are allocated on the basis of number of employees. The direct costs of Departments P1 and P2 are $9.000 and $15,000, respectively. Data on standard service hours and number of employees are as follows: Machine hours used Number of employees Direct labor hours MD 100 10 50 PD 50 20 50 P1 300 90 250 P2 150 90 250 Using the direct method, the cost of the Maintenance Department allocated to Department P1 is $15,000. $10,000 $20,000 $30,000. Previous Not saved
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