How much total costs will be allocated


The building maintenance department for Jones Manufacturing Company budgets annual costs of $4,200,000 based on the expected operating level for the coming year. The costs are allocated to two production departments. The following data relate to the potential allocation bases:

Production Dept. 1 Production Dept. 2
Square footage 15,000 45,000
Direct labor hours 25,000 50,000

If Jones assigns costs to departments based on square footage, how much total costs will be allocated to Production Department 1?

 

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Accounting Basics: How much total costs will be allocated
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