Support department cost allocation (10 points) Jakes Battery Company has two service departments, Maintenance and Personnel. Maintenance Department costs of $320,000 are allocated on the basis of budgeted maintenance- hours. Personnel Department costs of $80,000 are allocated based on the number of employees. The costs of operating departments A and B are $160,000 and $240,000, respectively. Data on budgeted maintenance- hours and number of employees are as follows:

	Support Departments		Production Departments
	Maintenance Department	Personnel Department	A	B
Budgeted costs	$320,000	$80,000	$160,000	$240,000
Budgeted maintenance- hours	NA	800	960	640
Numbers of employees	40	NA	160	480

1. What is the simultaneous equations you will set up to obtain the reciprocal cost of Maintenance Department (M) and Personnel Department (P)?

2. Step 2: Solve the equations to get complete reciprocated costs

3. Step 3: Allocate complete reciprocated costs:

	Support Departments		Production Departments
	Maintenance Department	Personnel Department	A	B
Budgeted costs
Allocation of Maintenance Department
Allocation of Personnel Department
Total overhead of production departments

	Support Departments		Production Departments
	Warehouse Department	Data Center Department	Music	Books
Budgeted costs Before any inter-department cost allocations
Allocation of Warehouse Department
Allocation of Data Center Department
Total overhead of operating departments