The centralized computer technology department of Lee Company has expenses of $264,000. The department has provided a total of 2,500 hours of service for the period. The Retail Division has used 1,125 hours of computer technology service during the period, and the Commercial Division has used 1,375 hours of computer technology service. How much should each division be charged for computer technology department services?
Answer:
Retail Division Service Charge for Computer Technology Department:
$118,800 = 1,125 billed hours × ($264,000 ÷ 2,500 hours billed)
Commercial Division Service Charge for Computer Technology Department:
$145,200 = 1,375 billed hours × ($264,000 ÷ 2,500 hours billed)
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