Brownley Company has two service departments and two operating (production) depa

Question

Brownley Company has two service departments and two operating (production) departments. The Payroll Department services all three of the other departments in proportion to the number of employees in each. The Maintenance Department costs are allocated to the two operating departments in proportion to the floor space used by each. Listed below are the operating data for the current period: The total cost of operating the Cutting Department for the current period is: $14,680. $16,529. $4,160. $95,019.

Explanation / Answer

Answer. $95019 Service Deptt. Prodution Deptt. Payroll Maintenance Cutting Assembly Direct Costs             20,800                  26,500             78,500             109,400 Allocation of Paroll Deptt. Exp.          (20,800)                    4,160                4,160               12,480 Balance                      -                    30,660             82,660             121,880 Allocation of Maintenance Deptt. Exp.                      -                  (30,660)             12,359               18,301 Total Expenese                      -                             -               95,019             140,181

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