# 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.

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

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).

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

Description

Pharmacy

Other Departments

Total

Volume Repairs

3

797

800

(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

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

300.00

14,700.00

15,000.00

Total

6,140.00

300,860.00

307,000.