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: Personnel 1,000 Maintenance Machine-hours Labor-hours Department direct costs Printing 1,000 500 $15,000 Developing 3,000 2,000 $10,000 500 $5,000 $12,000 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.)

Managerial Accounting
15th Edition
ISBN:9781337912020
Author:Carl Warren, Ph.d. Cma William B. Tayler
Publisher:Carl Warren, Ph.d. Cma William B. Tayler
Chapter5: Support Department And Joint Cost Allocation
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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:
Developing
3,000
2,000
$10,000
Maintenance
Personnel
Machine-hours
Labor-hours
Printing
1,000
500
1,000
500
Department direct costs
$5,000
$12,000
$15,000
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 department costs
Maintenance allocation
Personnel allocation
Total costs allocated
Transcribed Image Text: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: Developing 3,000 2,000 $10,000 Maintenance Personnel Machine-hours Labor-hours Printing 1,000 500 1,000 500 Department direct costs $5,000 $12,000 $15,000 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 department costs Maintenance allocation Personnel allocation Total costs allocated
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