Patterson Lawn Co. is the primary provider of lawn care maintenance in the city of Jasper. The Company has two operating departments, one that performs lawn care services for commercial properties and one that services residentiall properties Both operating departments are supported by two service departments, administrative and machine maintenance. Costs for each of these supporting departments are as follows Administrative 150,000 Total cost 225,000 The following estimates that are related to the operating departments as follows Commereial Residential 40 125 3,000 $425,000 20 60 285 5,000 $775,000 of employees ? of customers 2,000 $350,000 # of billable hour Total overhead cost "Note that total overhead cost includes costs allocated from service departments and other overhead costs. The Company uses the direct method to allocate service department cost to the operating departments. In order to allocate administrative costs, the Company has elected to use the # of employees as the cost driver. To allocate machine maintenance costs, the company uses the of billable hours as the cost driver Based on the information provided, how much of the administrative cost will be allocated to the residential properties operating department? Patterson Lawn Co. is the primary provider of lawn care maintenance in the city of Jasper. The Company has two operating departments, one that performs lawn care services for commercial properties and one that services residential properties. Both operating departments are supported by two service departments, administrative and machine maintenance. Costs for each of these supporting departments are as follows: Administrative $150,000 Machine Maintenance $225,000 Total cost The following estimates that are related to the operating departments is as follows: Commercial Residential Total properties properties 20 160 2,000 40 125 3,000 $425,000 60 285 5,000 $350, 000 775,000 # of employees # of customers # of billable hours Total overhead cost Note that total overhead cost includes costs allocated from service departments and other overhead costs. The Company uses the direct method to allocate service department cost to the operating departments. In order to allocate administrative costs, the Company has elected to use the # of employees as the cost driver. To allocate machine maintenance costs, the Company uses the # of billable hours as the cost driver. Based on the information provided, how much of the machine maintenance cost will be allocated to the commercial properties operating department? Patterson Lawn Co. is the primary provider of lawn care maintenance in the city of Jasper. The Company has two operating departments, one that performs lawn care services for commercial properties and one that services residential properties. Both operating departments are supported by two service departments, administrative and machine maintenance. Costs for each of these supporting departments are as follows: Administrative $150,000 Machine Maintenance $225,000 Total cost The following estimates that are related to the operating departments is as follows: CommercialResidential Machine properties properties Maintenance Total of employees of customers # of billable hours Total overhead cost 40 125 3,000 $425,000 20 160 2,000 $350,000 75 285 5,000 $775, 000 n/a n/a The Company uses the step method for cost allocation as the administrative service department also provides services to the machine maintenance department. Assume that costs are allocated between service departments based on the # of employees. Using the information provided, what is the total amount of machine maintenance cost that will be allocated to the operating
