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Anon25 [30]
3 years ago
6

Mervon Company has two operating departments: Mixing and Bottling. Mixing occupies 25,380 square feet. Bottling occupies 16,920

square feet. Indirect factory costs include maintenance costs of $238,000.
Required:
a. If maintenance costs are allocated to operating departments based on square footage occupied, determine the amount of maintenance costs allocated to each operating department
Business
1 answer:
WITCHER [35]3 years ago
8 0

Answer:

Mixing   = $142,800

Bottling = $95,200

Explanation:

Th amount of indirect cost of maintenance to be allocated to the two departments would be as follows:

<em>Allocated Maintenance department cost :</em>

Mixing  = 25,380/( 25,380 +16,920) ×  $238,000 = 142800

Bottling = 16,920/( 25,380 +16,920) × $238,000= 95200

<em>Allocated maintenance overheads</em>

Mixing   = $142,800

Bottling = $95,200

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