How much of the departments cost would be allocated
Peterson Company has two service departments (Cafeteria and Human Resources) and two production departments (Machining and Assembly). The number of employees in each department follows.
Cafeteria 40
Human Resources 60
Machining 200
Assembly 300
Peterson uses the direct method of cost allocation and allocates cost on the basis of employees. If Human Resources cost amounts to $1,800,000, how much of the department's cost would be allocated to Machining?
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