Refer to the facts in Exercise. Assume that both Building A and Building B work on just two jobs during the month of June: RW-12 and RW-13. Costs are allocated to jobs based on labor-hours in Building A and machine-hours in Building B. The number of labor-and machine-hours worked in each department are as follows:

In Exercise, Warren Ltd. has two production departments, Building A and Building B, and two service departments, Maintenance and Cafeteria. Direct costs for each department and the proportion of service costs used by the various departments for the month of June follow:

Required
How much of the service department costs allocated to Building A and Building B in the direct method should be allocated to Job RW-12? How much should be allocated to JobRW-13?

Transcribed Image Text:

Building B 30 60 30 270 Building A Job RW-12: Labor-hours. 240 Machine-hours.. Labor-hours. Machine-hours.. 20 30 30 Job RW-13 Proportion of Services Used by Department Direct Costs Maintenance Cafeteria Building A BuildingB Building A.... $495,000 Building B322,000 Maintenance Cafeteria..160,000 0.5 0.1 0.3 0.1 200,000 0.2 0.8