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Mammoth Mats has two service departments (maintenance and administration) and two operating departments (fabrication and assembly). Management uses machine hours to allocate maintenance costs in each department and direct labor cost to allocate administration costs. The following data appear on the company records for the current period: Machine hours Direct labor cost Department direct costs Maintenance Administration Fabrication Assembly $5,000 $20,000 500 $30,000 1,500 1,000 $10,000 $10,000 $40,000 $60,000 If the direct method of allocating service costs is used, how much service cost will be allocated to the assembly department? (Round your answer.)

Mammoth Mats has two service departments (maintenance and administration) and two operating departments (fabrication and assembly). Management uses machine hours to allocate maintenance costs in each department and direct labor cost to allocate administration costs. The following data appear on the company records for the current period: Machine hours Direct labor cost Department direct costs Maintenance Administration Fabrication Assembly $5,000 $20,000 500 $30,000 1,500 1,000 $10,000 $10,000 $40,000 $60,000 If the direct method of allocating service costs is used, how much service cost will be allocated to the assembly department? (Round your answer.)

Principles of Cost Accounting
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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Mammoth Mats has two service departments (maintenance and administration) and two operating departments (fabrication and assembly). Management uses machine hours to allocate maintenance costs in each department and direct labor cost to allocate administration costs. The following data appear on the company records for the current period: Machine hours Direct labor cost Department direct costs Maintenance Administration Fabrication Assembly $5,000 $20,000 500 $30,000 1,500 $10,000 $40,000 1,000 $10,000 $60,000 If the direct method of allocating service costs is used, how much service cost will be allocated to the assembly department? (Round your answer.)
Transcribed Image Text:Mammoth Mats has two service departments (maintenance and administration) and two operating departments (fabrication and assembly). Management uses machine hours to allocate maintenance costs in each department and direct labor cost to allocate administration costs. The following data appear on the company records for the current period: Machine hours Direct labor cost Department direct costs Maintenance Administration Fabrication Assembly $5,000 $20,000 500 $30,000 1,500 $10,000 $40,000 1,000 $10,000 $60,000 If the direct method of allocating service costs is used, how much service cost will be allocated to the assembly department? (Round your answer.)
If the direct method of allocating service costs is used, how much service cost will be allocated to the assembly department? (Round your answer.) a) $22,758 Ob) $23,000 c) $23,334 d) $23,456
Transcribed Image Text:If the direct method of allocating service costs is used, how much service cost will be allocated to the assembly department? (Round your answer.) a) $22,758 Ob) $23,000 c) $23,334 d) $23,456
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