University Printers has two service departments (Maintenance and Personnel) and two operating departments (Printing and Developing). Management has decided to allocate maintenance costs on the basis of machine-hours in each department and personnel costs on the basis of labor-hours worked by the employees in each.
The following data appear in the company records for the current period:
Required:
Use the step method to allocate these service department costs to the operating departments, allocate from Maintenance first.

Total Cost Printing ___________________ Total Cost Developing _________________

Service Departments Production Departments Printing Maintenance Personnel Developin Total Direct Costs 40,000$ 20,000 $ 40,000 $ 20,000 $ 120,000 Machine Hours Labor Hours 3,000 1,000 1,000 3,000 2,000 6,000 5,000 1,000