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How much of the total support department costs should

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Reference no: EM132661418

Company operates with two processing departments: the cutting department and the assembly department.
The human resources and maintenance departments support the processing departments.

Budgeted costs for the support departments :

                               Human resources           Maintenance

Salaries and wages           $ 105,000                   $ 14,000

Direct costs                    15,000                         24,000

Depreciation                  30,000                             32,000

Total                           $ 150,000                       $ 70,000

Costs are allocated to the processing departments based on the following activity levels:

Supplied by

                                 Human resources          Maintenance            Cutting              Assembly

Human resources (employees)  15                        25                          175                   200

Maintenance (square metres)   2,000                     3,000                 10,000                40,000

Problem 1: Using the step-down method, beginning with human resources, how much of the total support department costs should be allocated to assembly?

Reference no: EM132661418

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