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The cost of operating the Maintenance Department is to be allocated to four production departments based on the floor space each occupies
The cost of operating the Maintenance Department is to be allocated to four production departments based on the floor space each occupies. Department A occupies 900 m2. Department B, 900 m2Department C, 1000 m²; and Department D. 500 m2. If the July cost was $39,600, how much of the cost of operating the Maintenance Department should be allocated to each production department?
Expert Solution
Let the cost of operating for per square metre is $x
According to the question,
900x + 900x + 1000x +500x = 39600
or, 3300x = 39600
or, x = 39600 / 3300
or, x = 12
The operating cost for Department A is $(900 x 12) = $ 10800
The operating cost for Department B is$( 900 x 12) = $10800
The operating cost for Department C is $(1000 x 12) =$12000
The operating cost for Department D is $(500 x 12) = $6000
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