Q3

Medusa Co. allocates costs from the payroll department (S1) and the maintenance department (S2) to the molding (P1), finishing (P2), and packaging (P3) departments. Payroll department costs are allocated based on the number of employees in the department and maintenance department costs are allocated based on the number of square feet which the production department occupies within the factory. Information about the departments is presented below:

# of

No. of Sq. Ft.

Department Costs Employees Occupied

Payroll (S1) $144,000 2 2,000

Maintenance (S2) 220,000 8 64,000

Molding (P1) 62 100,000

Finishing (P2) 47 60,000

Packaging (P3) 17 40,000

Medusa uses the direct method to allocate costs. Round all answers to the nearest dollar.

What amount of the payroll department costs will be allocated to the molding department?