Bricks and Mortar Manufacturing produces building materials for local constructi
ID: 2522832 • Letter: B
Question
Bricks and Mortar Manufacturing produces building materials for local construction contractors. BMM has two production departments (Mixing and Baking) and two service departments (Maintenance and Cleaning). Maintenance costs are allocated based on machine hours used. Cleaning costs are allocated based on square feet of floor space.
The following data is available for BMM:
600 square feet of floor space,
200 machine hours used
450 square feet of floor space,
500 machine hours used
How much of the Cleaning costs should be allocated to the Baking department?
Mixing:600 square feet of floor space,
200 machine hours used
Baking:450 square feet of floor space,
500 machine hours used
Maintenance costs incurred: $4,900 Cleaning costs incurred: $2,300Explanation / Answer
Cleaning costs are allocated based on square feet of floor space.
Total floor space = 600 + 450 = 1,050 square feet
Cleaning costs should be allocated to the Baking department = 2,300 * 450 / 1,050
= 986
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