Question

Brownley Company has two service departments and two operating (production) departments. The Payroll Department services all three of the other departments in proportion to the number of employees in each. The Maintenance Department costs are allocated to the two operating departments in proportion to the floor space used by each. Listed below are the operating data for the current period: Service Depts. Production Depts. Payroll Maintenance Cutting AssemblyDirect costs $20,400 $25,500 $76,500 $105,400No. of personnel 15 15 45Sq. ft. of space 10,000 15,000The total cost of operating the Maintenance Department for the current period is:a. $14,280.b. $15,912.c. $25,500.d. $29,580.e. $22,412.

Answer 1

Answer:

d. $29,580.

Explanation:

Note: The data in the question are merged together and they are first sorted and separated as given in the attached file before the question is answered.

Cost individually incurred by Maintenance = $25,500

Share of Payroll Department cost = $20,400 * (15/75) = $4,080

Total Maintenance Cost = $25,500 + $4,080 = $29,580.

Therefore, he total cost of operating the Maintenance Department for the current period is d. $29,580.

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