Computing the administrative cost


Response to the following problem:

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 administrative cost allocated to each operating department.

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Managerial Accounting: Computing the administrative cost
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