Hanung Corp has two service departments, Maintenance and Personnel. Maintenance
ID: 2452141 • Letter: H
Question
Hanung Corp has two service departments, Maintenance and Personnel. Maintenance Department costs of $300,000 are allocated on the basis of budgeted maintenance-hours. Personnel Department costs of $100,000 are allocated based on the number of employees. The costs of operating departments A and B are $160,000 and $240,000, respectively. Data on budgeted maintenance-hours and number of employees are as follows:
Support Departments
Production Departments
Maintenance Department
Personnel Department
A
B
Budgeted costs
$300,000
$100,000
$160,000
$240,000
Budgeted maintenance-hours
NA
800
1,200
600
Number of employees
50
NA
200
600
Use the direct method to allocate maintenance and personnel department costs to the production departments. Show the total costs of the production departments.
Support Departments
Production Departments
Maintenance Department
Personnel Department
A
B
Budgeted costs
$300,000
$100,000
$160,000
$240,000
Budgeted maintenance-hours
NA
800
1,200
600
Number of employees
50
NA
200
600
Explanation / Answer
Hanung Corp Allocation of Maintenance and Personnel department costs to production departments Support Departments Production Departments Allocation Base Maintenance Department Personnel Department A B A Budgeted Costs $ 3,00,000 $ 1,00,000 $ 1,60,000 $ 2,40,000 Allocaton of Maintenance Department costs to production department - Direct Method Budgeted Maintenance hours 1200 600 B Allocated Maintenace department Cost 1200: 600 $ -3,00,000 $ 2,00,000 $ 1,00,000 Allocaton of Personnel Department costs Number of Employees 200 600 C Allocated personnel department cost 200:600 $ -1,00,000 $ 25,000 $ 75,000 D Total cost of Production Departments (A) + (B) + © $ 3,85,000 $ 4,15,000
Related Questions
drjack9650@gmail.com
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.