Please show step by step how to allocate QS 22-2 Allocating costs to departments
ID: 2572259 • Letter: P
Question
Please show step by step how to allocate QS 22-2 Allocating costs to departments Mervon Company has two operating departments: mixing and bottling. Mixing has 300 employees and occupies 22,000 square feet. Bottling has 200 employees and occupies 18,000 square feet. Indirect factory costs for the current period follow: administrative, $160,000; and maintenance, $200,000. Administrative costs are allocated to operating departments based on the number of workers. Determine the administra- P1 tive costs allocated to each operating department. as 22-3 llocating costs to epartments Pl Mervon Company has two operating departments: mixing and bottling. Mixing has 300 employees and occupies 22,000 square feet. Bottling has 200 employees and occupies 18,000 square feet. Indirect factory costs for the current period follow: administrative, $160,000; and maintenance, $200,000. If the mainte nance costs are allocated to operating departments based on square footage, determine the amount of maintenance costs allocated to each operating department.
Explanation / Answer
Administrative Cost allocated on basis of No. of employees
Amt in $ Particulars Mixing Bolting Administrative Cost 96,000 64,000 Maintenance Cost 110,000 90,000