Concept explainers
Cost Allwat ion: Direct Method
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:
Required
Use the direct method to allocate these service department costs to the operating departments.
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