Question

the lucas manufacturing company has two production departments (fabrication and assembly) and three service departments (general factory administration, factory maintenance, and factory cafeteria). a summary of costs and other data for each department, prior to allocation of service department costs for the year ended june 30, appears below. the costs of the general factory administration department, factory maintenance department, and factory cafeteria are allocated on the basis of direct labor hours, square footage occupied, and number of employees, respectively. fabrication assembly general factory admin. factory maint. factory cafeteria direct labor costs: $1,950,000 $2,050,000 direct material costs: $3,130,000 $ 950,000 factory overhead costs: $1,650,000 $1,850,000 $80,000 $67,500 $58,000 direct labor hours: 237,690 387,810 number of employees: 160 128 20 42 25 sq. footage occupied: 20,000 30,000 2,400 2,000 4,800 assuming that lucas elects to distribute service department costs to production departments using the direct distribution method, the amount of factory maintenance department costs that would be allocated to the fabrication department would be (round all final calculations to the nearest dollar): group of answer choices $22,804. $15,000. $27,000. $14,674.

Answer 1

Answer:

$27,000

Explanation:

The computation of the amount of factory maintenance department costs that would be allocated to the fabrication department  is shown below:

= Fabrication square foot occupied ÷ Total square foot occupied × factory overhead cost of factory maintenance department  

= 20,000 ÷ 50,000 × $67,500

= $27,000

The overhead cost of factory maintenance department is allocated on square foot occupied and the same is considered

The total square foot occupied is

= 20,000 + 30,000

= 50,000