Problem: Aco has two service departments (computer Operations and Maintenance Services). Aco has two production departments (mixing department & Packaging department.) Aco uses a step allocation method where the Computer Operations Department is allocated to all departments and maintenance service is allocated to the production departments. All allocations are based on total employees. Computer Operations has costs of $135,000 and Maintenance Services has costs of $170,000 before any allocations.
Employees are:
Computer Operations 4
Maintenance Services 2
Mixing Department 8
Packaging Department 6
Required: Calculate Amount of Maintenance Services total cost is allocated to Mixing Department.
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