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The accountant for Milton, Inc. is preparing the budgets for operating department support service costs. Maintenance costs are allocated based on square feet, and
The accountant for Milton, Inc. is preparing the budgets for operating department support service costs. Maintenance costs are allocated based on square feet, and cafeteria costs are allocated based on number of employees. The following data have been collected: Support Departments Operating Departments Maintenance Cafeteria Cutting Packaging Direct costs $50,000 $45,000 $275,000 $300,000 Number of employees 15 150 250 Square feet 2.000 3,500 4,000 If the step-down method is used, and maintenance department is the most general support department, cafeteria costs allocated to the packaging department will be $28.125 $84.704
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