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Write 1 page with APA style on Allocation of Costs. May 25, Allocation of_Costs A: Activity_based costing Table shows (appendix section) the allocation of the maintenance_department labor_cost using the activity_based cost (Epstein, 2011). By multiplying the labor_hours by the labor_cost per_hour, the total labor_cost is generated. For the maintenance aspect, the total labor_cost is \$120,000. For the repair activities, the total labor_cost is \$72,000. The total labor_cost of the entire company is \$192,000.00.

Allocation of Maintenance Supplies Cost

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Write 1 page with APA style on Allocation of Costs. May 25, Allocation of_Costs A: Activity_based costing Table shows (appendix section) the allocation of the maintenance_department labor_cost using t
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Table 2 (appendix section) shows the financial allocation of the maintenance_department’s supply cost_allocation. The allocation is grounded on the actual supplies that were used each department. For the pharmacy, the allocation is arrived at using the formula: (200/80,000) x \$100,000. The other departments’ share of the \$100,000 maintenance supply_costs is: \$ 79,800/80,000) x \$ 100,000 (Finkler et al., 2013).

Allocation of Maintenance Administration Cost

Table 3 (Appendix section) shows the allocation of the maintenance_department administration_costs (Finkler et al., 2013). The costs are allocated using the volume of repairs output of Pharmacy department_and resources. The pharmacy department formula is: (3/800)x\$15,000. The formula for the other departments’ share of the maintenance_department’s administration_costs was generated using the formula: (797/800)x15,000=\$14,977.00 (Epstein, 2011).

Summary of maintenance_department’s costs allocation

The table 4 shows the breakdown of the maintenance departments’ allocation to the Pharmacy and other departments (Epstein, 2011).

B: Absorption_Costing

Table 5 (appendix section) shows the allocation of the maintenance_department costs (Finkler et al., 2013). The costs are allocated based on the square_feet factor. For example, the maintenance_department’s labor_cost allocated to the pharmacy department was computed using: (2,000/100,000)*192,000.00= \$3,840.00.

References:

Epstein, M. (2011). Advances in Management Accounting. New York: Emerald Press.

Finkler et al., (2013). Financial Management for Public, Health, and Not-For-Profit Organizations . Upper Saddle River: Pearson Press.

Appendix

Table 1

Allocation of Maintenance Labor Cost

Computation

Maintenance

Repairs

Total

Labor hours

10,000

4,000

14,000

Labor Cost/Hr

12.00

18.00

13.71

Total Labor Cost

120,000

17,000

192,000

Table 2:

Allocation of Maintenance Supplies Cost

Description

Pharmacy

Other Departments

Total

Actual Department supplies

200

79,800

80,000.00

Allocation (maintenance supply cost)

(200/80,000)x 100,000

(79/800/80,000)x 100,000

100,000.00

Table 3

Allocation of Maintenance Administration Cost

Description

Pharmacy

Other Departments

Total

Volume Repairs

3

797

800

Allocation of Maintenance Administration Cost

(3/800)x 15,000

(797/800) x15,000

15,000.00

Table 4

Summary of maintenance costs’ allocation

Costs

Pharmacy

Other Departments

Total Maintenance Department Costs

Labor

288.00

191,712.00

192,000.00

Supplies

250.00

99,750.00

100,000.00

Administration

22.50

14,977.50

15,000.00

Total

560.6

306,439.50

307,000.00

Table 5

Absorption_Costing

Costs

Pharmacy

Other Departments

Total Maintenance Department Costs

Square feet

2,000.00

98,000.00

100,000.00

Labor Costs

3,840.00

188,160.00

192,00.00

Supplies

2,000.00

98,000.00

100,000.00

Administration

300.00

14,700.00

15,000.00

Total

6,140.00

300,860.00

307,000.

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