Question

Mervon Company has two operating departments: mixing and bottling. Mixing occupies 22,000 square feet. Bottling occupies 18,000 square feet. Indirect factory costs include maintenance costs of $200,000. If the maintenance costs are allocated to operating departments based on square footage occupied, determine the amount of maintenance costs allocated to each operating department.

Answer 1

Answer:

Instructions are listed below.

Explanation:

Giving the following information:

Mixing occupies 22,000 square feet. Bottling occupies 18,000 square feet. Indirect factory costs include maintenance costs of $200,000. The maintenance costs are allocated to operating departments based on square footage occupied.

Total square feet= 40,000

Mixing= 22,000/40,000= 0.55*200,000= $110,000

Bottling= 18,000/40,000= 0.45*200,000= $90,000