How much maintenance cost should be allocated to department


Koreen Manufacturing Co. has three production departments. Koreen allocates maintenance costs to the departments based on their use of machine hours. The maintenance cost for March was $180,000. The departments' usage of labor and machine hours in March were:

Department Machine hours Labor hours
A 500 3,000
B 500 5,000
C 800 2,000

How much maintenance cost should be allocated to department B for March?

 

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Finance Basics: How much maintenance cost should be allocated to department
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