Solution-Compute the total amount of support costs

Compute the total amount of support costs

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Reference no: EM132961998

Question - Company has two service departments, Maintenance (MT) and Human resources (HR) and two production departments, P1 and P2. Maintenance Department costs of $125,000 are allocated on the basis of square feet of area in each department. The number of square feet in the HR, P1 and P2 departments are 400sqft, 600 sqft. and 700 sqft respectively. The HR Department costs of $50,000 are allocated based on the number of employees in each department. The numbers of employees in the Maintenance, P1 and P2 departments are 10, 100, and 80 respectively.

Compute the total amount of support costs allocated to each of the two operating departments, P1 and P2 using the reciprocal allocation method.

Reference no: EM132961998

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Compute the total amount of support costs

Reference no: EM132961998

Reference no: EM132961998

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