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Company F has two production departments, A and B, and two service departments, janitorial and personnel. Personnel costs are allocated based on number of employees and janitorial costs are allocated based on size of the department in square meters
Department No. of Employees Sq. Meters Direct Costs A 150 10,000 $ 750,000 B 200 20,000 600,000 Janitorial 25 1,000 25,000 Personnel 15 2,000 18,000 Total 390 33,000 $1,393,000
problem 1: Under the direct allocation method, what amount of janitorial costs would be allocated to Department B (round to the nearest dollar)?
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