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Magnificent manufacturing has a cleaning department and a maintenance department that provide services to three...

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Accounting

Magnificent manufacturing has a cleaning department and a maintenance department that provide services to three operations departments (machining, assembly and finishing). The cleaning department's costs are allocated based on floor space and the maintenance department's costs are allocated based on number of machines. The company uses the direct method for allocating support department costs.

Cleaning Maintenance Machining Assembly Finishing
Budgeted overhead costs ($) 375,000 367,500
Allocation basis Space (sq m) No. of machines
Space (sq m) 2,000 3,500 15,000 35,000 25,000
No. of machines 5 10 28 52 25

Using the information in the above table, calculate the amount of overhead that is allocated from the Cleaning department to the Finishing department.

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