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Question - 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
-
1,200
3,600
Labor-hours
650
2,600
Department direct costs
$3,000
$13,000
$14,400
$11,500
Required - Use the direct method to allocate these service department costs to the operating departments.
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