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QUESTION 18 Hanung Corp has two service departments, Maintenance and Personnel. Maintenance Department costs of $400,000 are allocated on the basis of budgeted maintenance-hours. Personnel
QUESTION 18 Hanung Corp has two service departments, Maintenance and Personnel. Maintenance Department costs of $400,000 are allocated on the basis of budgeted maintenance-hours. Personnel Department costs of $120,000 are allocated based on the number of employees. The costs of operating departments A and B are $208,000 and $312,000, respectively. Data on budgeted maintenance- hours and number of employees are as follows: Production Departments Support Departments Maintenance Personnel Department Department $400,000 $120,000 NA 850 $208,000 $312,000 1250 640 Budgeted costs Budgeted maintenance -hours Number of employees 65 NA 220 630 Using the step-down method, what amount of Personnel Department cost will be allocated to Department B if the Maintenance Department is allocated first? (Round up) $137,566 $180,912 $54,745 $264,550 QUESTION 4 Alfred, owner of Hi-Tech Fiberglass Fabricators, Inc., is interested in using the reciprocal allocation method. The following data from operations were collected for analysis: Budgeted m mufacturing overhead costs: Plant Maintenance PM (Support Dept) Data Processing DP (Support Dept) Machining M (Operating Dept) Capping C(Operating Dept) $380,000 $90,000 $250,000 $135,000 Services furnished: By Plant Maintenance (budgeted labor-hours): to Data Processing to Machining to Capping By Data Processing (budgeted computer time): to Plant Maintenance to Machining to Capping 3000 6000 8000 1000 3700 500 What is the complete reciprocated cost of the Plant Maintenance Department? $470,000 $409,789 $411,265 $408,607
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