The RAH Manufacturing Company has two service departments: Maintenance and Accounting. The Maintenance Department's cost of 300,000 are allocated on the basis of machine hours. The Accounting Department's cost of $120,000 are allocated on the basis of the number of employees within a specific department. The direct departmental cost for A and B are $300,000 and $500,000, respectively.
- Maint Acctg A B
- Machine Hours 4800 20 2300 200
- Number of employees 2 2 8 4
a. What is the Maintenance Department's cost allocated to Department A using the direct method?
b. What is the Accounting Department's cost allocated to Department B using the direct method?
c. What is the Maintenance Department's cost allocated to Department B using the step method and assuming the Maintenance Department's costs are allocated first?