I know the answe is $9,250 but dont know how to calculate Oaks Company has two s

Question

I know the answe is $9,250 but dont know how to calculate

Oaks Company has two support departments, Maintenance Department (MD) and Personnel Department (PD), and two producing departments, P1 and P2. The Maintenance Department costs of $20,000 are allocated on the basis of standard service used. The Personnel Department costs of $4,500 are allocated on the basis of number of employees. The direct costs of Departments Pl and P2 are $9,000 and $15,000, respectively. Data on standard service hours and number of employees are as follows: Using the sequential method, if the support department with the highest percentage of interdepartmental service is allocated first, the cost of the support departments allocated to Department P2 is

Explanation / Answer

6500*90/180 = 3250

PD P1 P2 Allocation oF MD cost (20,000) in 50:300:150 = 500 20,000*50/500 = 2000 20000*300/500= 12000 20000*150/500= 6000 Allocation of PDTotal cost(4500+2000)=6500 in 90:90 =180 - 6500*90/180 = 3250

6500*90/180 = 3250

Total cost allocated 9250

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