The managers of Rochester Manufacturing are discussing ways to allocate the costs of service departments,...
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Accounting
The managers of Rochester Manufacturing are discussing ways to allocate the costs of service departments, such as Quality Control and Maintenance, to the production departments. To aid them in this discussion, the controller has provided the following information:
|
| Quality Control | Maintenance | Machining | Assembly | Total |
| Budgeted overhead costs before allocation | $350,000 | $200,000 | $400,000 | $300,000 | $1,250,000 |
| Budgeted machine hours | -- | -- | 50,000 | -- | 50,000 |
| Budgeted direct labor hours | --- | --- | -- | 25,000 | 25,000 |
| Budgeted hours of service: |
|
|
|
|
|
| Quality control | --- | 7,000 | 21,000 | 7,000 | 35,000 |
| Maintenance | 10,000 | --- | 18,000 | 12,000 | 40,000 |
If Rochester uses the direct method of allocating service department costs, the total service costs allocated to the assembly department would be:
A) $80,000
B) $87,500
C) $120,000
D) $167,500
Please Show All Steps. Thank You.
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