Solaire Corporation produces reusable greeting cards in two
departments: Printing and Laminating. These departments are
supported by two service departments: Personnel and Maintenance.
Personnel use the number of employees as an allocation base and
Maintenance uses machine hours. The expected level of activity for
next quarter is shown below:
# of Employees Machine hrs
Personnel 40 –
Maintenance 60
–
Printing 120 60,000
Laminating 180
40,000
Allocations are made in the order shown below. Budgeted costs
for next quarter are $93,000 for Personnel and $68,000 for
Maintenance.
Question/s:
Total amount of service cost that should be allocated to the
printing and laminating department under:
1. Direct method
2. Step method
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