Question
The Hsu Manufacturing Company has two service departments: Maintenance and Accounting. The Maintenance Department's costs of $641,850 are allocated on the basis of machine hours.
The Hsu Manufacturing Company has two service departments: Maintenance and Accounting. The Maintenance Department's costs of $641,850 are allocated on the basis of machine hours. The Accounting Department's costs of $212,400 are allocated on the basis of the number of employees within a specific department. The direct departmental costs for A and B are $390,000 and $590,000, respectively.
Maint | Acctg | A | B | |
Machine hours | 495 | 65 | 3,600 | 290 |
Number of employees | 2 | 2 | 8 | 4 |
What is the Maintenance Department's cost allocated to Department B using the step method and assuming the Maintenance Department's costs are allocated first?
$594,000.
$47,064.
$640,000.
$548,000.
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