Question
The RAH Manufacturing Company has two service departments: Maintenance and Accounting. The Maintenance Department's costs of $313,000 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 $313,000 are allocated on the basis of machine hours. The Accounting Department's costs of $133,000 are allocated on the basis of the number of employees within a specific department. The direct departmental costs for A and B are $313,000 and $513,000, respectively.
Maint Acctg A B
Machine hours 506 33 2,560 330
Number of employees 15 15 21 17
What is the Accounting Department's cost allocated to Department B using the direct method?
$59,500.
$3,500.
$73,500.
$52,500.
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