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Question - Golden Leaves Company has two support departments, Maintenance Department (MD) and Personnel Department (PD), and two producing departments, P1 and P2. The Maintenance Department costs of $30,000 are allocated on the basis of standard service hours used. The Personnel Department costs of $4,500 are allocated on the basis of number of employees. The direct costs of Departments P1 and P2 are $9,000 and $15,000, respectively.
Data on standard service hours and number of employees are as follows:
MD
PD
P1
P2
Standard service hours used
100
50
300
150
Number of employees
10
20
90
Direct labor hours
250
Required - Using the direct method, calculate the total cost of the two production departments P1 and P2 after the allocation.
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