Reference no: EM132251188

Question - Howie Corporation has a job order cost system and applies overhead based on departmental rates. Service Department #1 has total budgeted costs of $168,000 for next year. Service Department #2 has total budgeted costs of $280,000 for next year. Howie allocates service department costs solely to the producing departments. Service Department #1 cost is allocated to producing departments on the basis of machine-hours. Service Department #2 cost is allocated to producing departments on the basis of direct labor hours. Producing Department #1 has budgeted 8,000 machine-hours and 12,000 direct labor hours. Producing Department #2 has budgeted 2,000 machine-hours and 12,000 direct labor hours. What is the total cost allocation from the two service departments to Producing Department #1?

$173,600

$140,000

$134,400

$274,400