Chekley Manufacturing has two production departments (Machining and Assembly). They have two service departments that provide...
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Chekley Manufacturing has two production departments (Machining and Assembly). They have two service departments that provide services to each other and to production (Plant Maintenance and IT) Chekley believes Plant Maintenance (PM) should be allocated based on square footage and IT should be allocated based on computer hours. Chekley allocates Plant Maintenance first when allocating using the step method. You have the following additional information: COSTS Plant maintenance Information technology Machining Assembly Plant maintenance Information systems Machining Assembly Total manufacturing costs $ 350,000 $ 250,000 $ 2,500,000 $ 2,000,000 $ 5,100,000 Square Feet Computer hours 4,000.00 8,000.00 2,000.00 4,000.00 12,000.00 24,000.00 8,000.00 44,000.00 6,000.00 24,000.00 Problem A 1. Under the direct method, what percentage of PM should be allocated to Machining? 2. Under the direct method, what percentage of PM should be allocated to Assembly? 3. Under the direct method, how much of the total allocable cost attributable to PM should be allocated to Machinin 4. Under the direct method, how much of the total allocable cost attributable to PM should be allocated to Assembly 5. Under the direct method, what percentage of IT should be allocated to Machining? 6. Under the direct method, what percentage of IT should be allocated to Assembly? 7. Under the direct method, how much of the total allocable cost attributable to IT should be allocated to Machiningi 8. Under the direct method, how much of the total allocable cost attributable to IT should be allocated to Assembly? Chekley Manufacturing has two production departments (Machining and Assembly). They have two service departments that provide services to each other and to production (Plant Maintenance and IT) Chekley believes Plant Maintenance (PM) should be allocated based on square footage and IT should be allocated based on computer hours. Chekley allocates Plant Maintenance first when allocating using the step method. You have the following additional information: COSTS Plant maintenance Information technology Machining Assembly Plant maintenance Information systems Machining Assembly Total manufacturing costs $ 350,000 $ 250,000 $ 2,500,000 $ 2,000,000 $ 5,100,000 Square Feet Computer hours 4,000.00 8,000.00 2,000.00 4,000.00 12,000.00 24,000.00 8,000.00 44,000.00 6,000.00 24,000.00 Problem A 1. Under the direct method, what percentage of PM should be allocated to Machining? 2. Under the direct method, what percentage of PM should be allocated to Assembly? 3. Under the direct method, how much of the total allocable cost attributable to PM should be allocated to Machinin 4. Under the direct method, how much of the total allocable cost attributable to PM should be allocated to Assembly 5. Under the direct method, what percentage of IT should be allocated to Machining? 6. Under the direct method, what percentage of IT should be allocated to Assembly? 7. Under the direct method, how much of the total allocable cost attributable to IT should be allocated to Machiningi 8. Under the direct method, how much of the total allocable cost attributable to IT should be allocated to Assembly?
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Related Book For
Fundamentals of Cost Accounting
ISBN: 978-1259565403
5th edition
Authors: William Lanen, Shannon Anderson, Michael Maher
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