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X- Ch 11 Extra Credit C Exercise 11-30 Cost Allocation: S C University Printers Has Two Serv C Problem 11-51 Cost Allocation:

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Answer #1

Solution:

Service department cost = Direct cost + allocated costs

Maintenance department cost = $340,000

Processing department cost = $92,000 + $10% of maintenance cost = $92,000 + ($340,000*10%) = $126,000

Administration department cost = $620,000+ 40% of processing cost + 20% of maintenance cost

= $620,000 + ($126,000*40%) + ($340,000*20%) = $738,400

From Allocated To:
Costs Processing Administration Branches Electronic
Maintenance (10:20:20:50) $340,000.00 $34,000.00 $68,000.00 $68,000.00 $170,000.00
Processing (40:15:45) $126,000.00 $0.00 $50,400.00 $18,900.00 $56,700.00
Adminstration (60:40) $738,400.00 $0.00 $0.00 $443,040.00 $295,360.00
Total $529,940.00 $522,060.00
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