Question
Personnel costs are allocated based on the number of employees, and maintenance costs are allocated based on machine hours. Service Departments Producing Departments Personnel Maintenance
Personnel costs are allocated based on the number of employees, and maintenance costs are allocated based on machine hours.
Service Departments Producing Departments Personnel Maintenance Fabrication Assembly Budgeted overhead $40,000 $72,000 $140,000 $160,000 Machine-hours - - 12,000 8,000 Number of employees 4 10 15 25
A) Using the direct method, the percentage of total personnel costs allocated to Fabrication would be?
B) Using the step down method (and assuming the company allocated personnel costs first), the total amount of costs allocated from Maintenance to Assembly would be?
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