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 Assembly Direct costs $ 20,400 $ 25,500 $ 76,500 $ 105,400 No. of personnel 15 15 45 Sq. ft. of space 10,000 15,000 The total cost of operating the Maintenance Department for the current period is:

Answer 1

The total cost of the Maintenance Department is the sum of its fixed and variable costs, allocated to production departments based on floor space. However, the question lacks specific cost figures for the Maintenance Department.

Step-by-step explanation:

The question pertains to allocating costs from service departments to production departments in a company. The student is asked to determine the total cost of operating the Maintenance Department, which needs to be allocated to production departments based on the floor space used by each department. The data provided for the Maintenance Department must be summed up according to the given distribution keys (e.g., number of personnel for the Payroll Department and square footage for the Maintenance Department).

To calculate the total costs for operating the Maintenance Department, one would need to add the fixed costs and variable costs, but since this question does not provide specific costs for the Maintenance Department, a hypothetical figure will be used for illustrative purposes. If we assume the Maintenance Department has a fixed cost and variable costs associated with floor space, these would be summed to determine the total costs, much like the example provided with the barbershop.

Answer 2

The total cost of operating the Maintenance Department for the current period is $29,580

Step-by-step explanation:

In order to calculate The total cost of operating the Maintenance Department for the current period we would have to calculate first the Overhead allocated to Maintenance from Payroll department as follows:

Overhead allocated=Payroll overhead×(Maintenance payroll personnel/Total personnel)

Overhead allocated=$ 20,400×(15/15+15+45)

Overhead allocated=$4,080

Therefore, to calculate the The total cost of operating the Maintenance Department for the current period we would have to use the following formula:

Total cost of operating Maintenance Department=Overhead allocated+Direct overhead incurred

Total cost of operating Maintenance Department=$4,080+$25,500

Total cost of operating Maintenance Department=$29,580

The total cost of operating the Maintenance Department for the current period is $29,580