Medusa Compnay allocates costs from the payroll department (S1) and the maintena
ID: 2718019 • Letter: M
Question
Medusa Compnay allocates costs from the payroll department (S1) and the maintenance department (S2) to the molding (P1), finishing (P2), and packaging (P3) departments. Payroll department costs are allocated based on the number of employees in the department and maintenance department costs are allocated based on the number of square feet, which the production department occupies within the factory. Information about the departments is presented below:
Medusa uses the direct method to allocated costs. Round all answers to the nearest dollar. What amount of the payroll department costs will be allocated to the molding department?
department costs number of employees number of square feet occupied Payrol (S1) $147,000 2 2,000 Maintenance (S2) $220,000 8 64,000 Molding (P1) 66 100,000 Finishing (P2) 49 60,000 Packaging (P3) 24 40,000Explanation / Answer
Medusa Company Molding Finishing Packaging Total No Of employees 66.00 49.00 24.00 139.00 Payroll expense allocation 69,799 51,820 25,381 147,000 Squart feet Occupied 100,000 60,000 40,000 200,000 Maintenance Expense alloaction 110,000 66,000 44,000 220,000 Payroll department cost to be allocated to Molding department = $69,799