Ask Question
2 April, 00:00

Brownley Company has two service departments and two operating (production) departments. The Payroll Department services all three of the other departments in proportion to the number of employees in each. The Maintenance Department costs are allocated to the two operating departments in proportion to the floor space used by each. Listed below are the operating data for the current period: Service Depts. Production Depts. Payroll Maintenance Cutting Assembly Direct costs $ 20,400 $ 25,500 $ 76,500 $ 105,400 No. of personnel 15 15 45 Sq. ft. of space 10,000 15,000 The total cost of operating the Maintenance Department for the current period is:

+4
Answers (1)
  1. 2 April, 02:52
    0
    The total cost of operating the Maintenance Department for the current period is $29,580

    Explanation:

    In order to calculate The total cost of operating the Maintenance Department for the current period we would have to calculate first the Overhead allocated to Maintenance from Payroll department as follows:

    Overhead allocated=Payroll overhead * (Maintenance payroll personnel/Total personnel)

    Overhead allocated=$ 20,400 * (15/15+15+45)

    Overhead allocated=$4,080

    Therefore, to calculate the The total cost of operating the Maintenance Department for the current period we would have to use the following formula:

    Total cost of operating Maintenance Department=Overhead allocated+Direct overhead incurred

    Total cost of operating Maintenance Department=$4,080+$25,500

    Total cost of operating Maintenance Department=$29,580

    The total cost of operating the Maintenance Department for the current period is $29,580
Know the Answer?
Not Sure About the Answer?
Find an answer to your question ✅ “Brownley Company has two service departments and two operating (production) departments. The Payroll Department services all three of the ...” in 📘 Business if you're in doubt about the correctness of the answers or there's no answer, then try to use the smart search and find answers to the similar questions.
Search for Other Answers