Question

The Dahle Manufacturing Company has two production departments (Assembly and Finishing) and two service departments (Human Resources and Janitorial). The projected usage of the two service departments is as follows: Use of Human Resources Use of Janitorial Human resource --- 5 % Janitorial 10 % --- Assembly 60 % 40 % Finishing 30 % 55 % The budgeted costs in the service departments are: Human Resources, $90,000 and Janitorial, $50,000. Using the step-down method and assuming the Human Resources Department is allocated first, the amount of Human Resources cost allocated to the Assembly Department is:

Answer 1

Answer:

$54,000

Explanation:

Calculation to determine what the amount of Human Resources cost allocated to the Assembly Department is:

Using this formula

Human Resources cost allocated to the Assembly Department=Human Resources budgeted costs* Human resource percentage

Let plug in the formula

Human Resources cost allocated to the Assembly Department=$90,000 x 60%

Human Resources cost allocated to the Assembly Department = $54,000

Therefore Using the step-down method and assuming the Human Resources Department is allocated first, the amount of Human Resources cost allocated to the Assembly Department is:$54,000