Jake's Battery Company has two service departments, Maintenance and Personnel. Maintenance Department costs of $320,000 are allocated on the basis of budgeted maintenance-hours. Personnel Department costs of $80,000 are allocated based on the number of employees. The costs of operating departments A and B are $160,000 and $240,000, respectively. Data on budgeted maintenance-hours and number of employees are as follows:

	Support Departments		Production Departments
	Maintenance Department	Personnel Department	A	B
Budgeted costs	$320,000	$80,000	$160,000	$240,000
Budgeted maintenance-hours	NA	800	960	640
Number of employees	40	NA	160	480

Using the direct method, what amount of Maintenance Department costs will be allocated to Department B?

Answer rating: 100% (QA)

The direct method of allocation allocates support department costs directly to production ... View the full answer