The cost of the maintenance department at forest

Reference no: EM13600437

The cost of the Maintenance Department at Forest Manufacturing has always been charged to the production departments based on the number of employees. Recently, an activity analysis of possible cost drivers was performed which indicated that the square feet of space may also be a predictor of costs to be assigned to each production department. The Maintenance Department cost is $1,000,000. The following data is available:

Production Departments
Dept. X Dept. Y Dept. Z
Number of Employees 300 250 50
Square Feet of Space 15,000 25,000 10,000

Required:
Determine the amount of the maintenance department cost that should be allocated to Department X if the cost driver used is: (A) number of employees and (B) square feet of space.

Reference no: EM13600437

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