Patterson Lawn Company is the primary provider of lawn care maintenance in the city of Jasper....

 

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Patterson Lawn Company is the primary provider of lawn care maintenance in the city of Jasper. The Company has two operating departments, one that performs lawn care services for commercial properties and one that services residential properties. Both operating departments are supported by two service departments, administrative and machine maintenance. Costs for each of these supporting departments are as follows: Administrative Total cost Machine Maintenance $240,000 $168,000 The following estimates that are related to the operating departments is as follows: Residential properties Commercial properties 40 125 Number of employees 60 Number of customers 285 Number of billable hours 3,000 2,000 5,000 Total overhead cost $ 440,000 $ 362,000 $ 802,000 *Note that total overhead cost includes costs allocated from service departments and other overhead costs. Total 20 160 The Company uses the direct method to allocate service department cost to the operating departments. In order to allocate administrative costs, the Company has elected to use the number of employees as the cost driver. To allocate machine maintenance costs, the Company uses the number of billable hours as the cost driver. Based on the information provided, how much of the machine maintenance cost will be allocated to the commercial properties operating department? Patterson Lawn Company is the primary provider of lawn care maintenance in the city of Jasper. The Company has two operating departments, one that performs lawn care services for commercial properties and one that services residential properties. Both operating departments are supported by two service departments, administrative and machine maintenance. Costs for each of these supporting departments are as follows: Administrative Total cost Machine Maintenance $240,000 $168,000 The following estimates that are related to the operating departments is as follows: Residential properties Commercial properties 40 125 Number of employees 60 Number of customers 285 Number of billable hours 3,000 2,000 5,000 Total overhead cost $ 440,000 $ 362,000 $ 802,000 *Note that total overhead cost includes costs allocated from service departments and other overhead costs. Total 20 160 The Company uses the direct method to allocate service department cost to the operating departments. In order to allocate administrative costs, the Company has elected to use the number of employees as the cost driver. To allocate machine maintenance costs, the Company uses the number of billable hours as the cost driver. Based on the information provided, how much of the machine maintenance cost will be allocated to the commercial properties operating department?

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