Managerial Accounting Quiz
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COSTING SYSTEMS
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A company has two main departments, Assembly and Finishing. It also has two support departments, Maintenance and Human Resources. The company is performing the first stage of an ABC allocation. The Maintenance Department has costs of $200,000 and its costs are allocated based on machine hours. The Human Resources department has costs of $150,000 and its costs are allocated based on the number of employees.
Assembly: 12,000 MH, 80 employees
Finishing: 8,000 MH, 20 employees
The Assembly department's activities have been aggregated into a single cost pool for the second stage of ABC.
After the first-stage allocation of support department costs, what is the total cost in the Assembly department's cost pool, before considering its own direct overhead costs?
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