Option b. $8,800 is the correct answer. The maintenance expense to be allocated to Assembly is $8800 as per the given budget and allocations
Service Costs are costs incurred by the service departments in assisting the production departments inside the company. Therefore, the service department cost is allocated to the production departments.
Maintenance Department Expense of Assembly = Maintenance Department Expense x (Square Footage of Assembly / Total Square Footage)
Maintenance Department Expense of Assembly = $26,400 x ( 2000 / 6,000)
Maintenance Department Expense of Assembly = $26,400 x 0.3333
Maintenance Department Expense of Assembly = $8799 or $8800
Hence the maintenance department expense of assembly is $8800
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