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Cost allocation

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The production departments at Chan Corporation occupy a total area of 600,000 square feet. Heating costs total $900,000 and are allocated based on the area that each department occupies. The finishing department occupies 30,000 square feet and the packaging department occupies 20,000 square feet. What amount of heating cost will be allocated to the finishing and packaging departments, respectively?

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Solution Summary

This solution explains how to calculate service cost allocation to production departments

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