Question 5 2 points X Company has two production departments

Question 5 (2 points) X Company has two production departments, Machining and Finishing. It has two service departments, Maintenance and Technology. The following table shows the number of hours of service provided by the service department to other departments. Using Department Service Dept Maintenance Technology Machining Finishing Maintenance Technology2,000 4,000 4,000 32,000 14,000 2,000 The Technology Department has costs of $720,000. The Maintenance Department has costs of $108,000 a Assume X Company uses the direct method of cost allocation, compute the amount of the Maintenance Department\'s cost that allocated to the Finishing Department. If you want to compute (2/9)*63000, multiply 2 times 63000 and then divide by 9. DO NOT multiply $63,000 by .22, Do not enter any dollar signs or commas. For example enter $20,000 as 20000 Save

Solution

Maintainance dept cost = 108000

Allocation of maintainance dept O/H to Finishing Dept = 108000 * (32000 hrs/36000 hrs)

                                              = 96000