Allocate maintenance department and general plan costs

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Reference no: EM133053015

Question - Cameron Company has two production departments and maintenance departments. In addition, the company keeps other costs for the general plan in a separate account. The estimated cost data for Year 1 follow:

Cost

Prod Dept 1

Prod Dept 2

Maintenance

General Plant

Direct Labor

$100,000

$60,000

--

--

Indirect Labor

$56,000

$28,000

$45,000

$40,000

Indirect Materials

$18,000

$14,000

$1,800

$16,000

Miscellaneous

$6,000

$10,000

$3,200

$10,000

 

$180,000

$112,000

$50,000

$66,000

Maintenance

16,000 Hours

24,000 Hours

--

--

The general plant services the three departments in the following proportions: 50 percent (Department 1); 30 percent (Department 2); 30 percent (Maintenance).

Required -

a. Allocate maintenance costs based on maintenance hours.

b. Allocate maintenance department and general plan costs to the production departments. Use the step method, starting with general plant costs.

Reference no: EM133053015

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