Battery Company has two service departments, Maintenance, and Personnel. Maintenance Department costs of $320,000 are allocated on the basis of budgeted maintenance-hours. Personnel Department costs of $80,000 are allocated based on the number of employees. The costs of operating departments A and B are $160,000 and $240,000, respectively. Data on budgeted maintenance-hours and number of employees are as follows:
Budgeted Costs, Budgeted Maintenance-Hours, Number of Employees
Maintenance Department: $320,000, NA, 40
Personnel Department: $80,000, 800, NA
a: $160,000, 960, 160
b: $240,000, 640, 480
1. Using the direct method, what amount of Maintenance Department costs will be allocated to Department B?
a. $96,000
b. $128,000
c. $156,000
d. $192,000
2. Using the direct method, what amount of Personnel Department costs will be allocated to Department B?
a. $20,000
b. $32,000
c. $48,000
d. $60,000
3. Using the step-down method, what amount of Maintenance Department cost will be allocated to Department B if the service department with the highest percentage of interdepartmental support service is allocated first? (Round up)
a. $64,000
b. $85,333
c. $114,667
d. $128,000
4. Using the direct method, what amount of Maintenance Department costs will be allocated to Department A?
a. $96,000
b. $128,000
c. $166,000
d. $192,000
5. Using the direct method, what amount of Personnel Department costs will be allocated to Department A?
a. $20,000
b. $32,000
c. $48,000
d. $60,000
6. Using the step-down method, what amount of Maintenance Department cost will be allocated to Department A if the service department with the highest percentage of interdepartmental support service is allocated first? (Round up)
a. $64,000
b. $85,333
c. $114,667
d. $128,000
