Question
The RAH Manufacturing Company has two service departments: Maintenance and Accounting. The Maintenance Department's costs of $303,000 are allocated on the basis of machine hours.
The RAH Manufacturing Company has two service departments: Maintenance and Accounting. The Maintenance Department's costs of $303,000 are allocated on the basis of machine hours. The Accounting Department's costs of $123,000 are allocated on the basis of the number of employees within a specific department. The direct departmental costs for A and B are $303,000 and $503,000, respectively.
Maint | Acctg | A | B | |
Machine hours | 486 | 23 | 2,360 | 230 |
Number of employees | 5 | 5 | 11 | 7 |
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? |
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