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: MaintenancePersonnelPrintingDevelopingMachine-hours— 1,800 1,800 5,400Labor-hours650 — 650 2,600Department direct costs $4,000$14,000$15,900 $12,600Required:Use the direct method to allocate these service department costs to the operating departments. (Negative amounts should be indicated by a minus sign. Do not round intermediate calculations.) MaintenancePersonnelPrintingDevelopingservice dept. costs maintenance allocation personnel allocation total cost allocation

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Answered: University Printers has two service…

Principles of Cost Accounting

17th Edition

ISBN:9781305087408

Author:Edward J. Vanderbeck, Maria R. Mitchell

Publisher:Edward J. Vanderbeck, Maria R. Mitchell

Chapter4: Accounting For Factory Overhead

Section: Chapter Questions

Problem 8E: A manufacturing company has two service and two production departments. Building Maintenance and...

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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:

	Maintenance	Personnel	Printing	Developing
Machine-hours	—	1,800	1,800	5,400
Labor-hours	650	—	650	2,600
Department direct costs	$4,000	$14,000	$15,900	$12,600

Required:

Use the direct method to allocate these service department costs to the operating departments. (Negative amounts should be indicated by a minus sign. Do not round intermediate calculations.)

	Maintenance	Personnel	Printing	Developing
service dept. costs
maintenance allocation
personnel allocation
total cost allocation

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