University Printers has two service departments (Maintenance and Personnel) and two operating departments (Printing and Developing). Management has decided to allocate maintenance costs on the basis of machine hours in each department and personnel costs on the basis of labor hours worked by the employees in each.
The following data appear in the company records for the current period:
| Maintenance | Personnel | Printing | Developing | |||||||||
| Machine hours | ” | 1,000 | 1,000 | 3,000 | ||||||||
| Labor hours | 500 | ” | 500 | 2,000 | ||||||||
| Department direct costs | $ | 15,000 | $ | 36,000 | $ | 45,000 | $ | 30,000 | ||||
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| Required: |
| (a) |
Allocate the service department costs using the step method, starting with the Maintenance Department. (Do not round intermediate calculations. Leave no cells blank be certain to enter “0” wherever required. Amounts to be deducted should be indicated with a minus sign. Omit the “$” sign in your response.) |