Caro Manufacturing has two production departments, Machining and Assembly, and two service departments, Maintenance and Cafeteria. Direct
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Question:
Caro Manufacturing has two production departments, Machining and Assembly, 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 August follow:
Proportion of Services Used by | |||||||||||
Department | Direct Costs | Maintenance | Cafeteria | Machining | Assembly | ||||||
Machining | $ | 99,000 | |||||||||
Assembly | 64,400 | ||||||||||
Maintenance | 40,000 | — | 0.2 | 0.5 | 0.3 | ||||||
Cafeteria | 32,000 | 0.8 | — | 0.1 | 0.1 | ||||||
Required:
Use the step method to allocate the service costs, using the following:
a. The order of allocation starts with Maintenance.
To | ||||
From | Cafeteria | Maitanence | Machining | Assembly |
Service Department Costs | ||||
Maitanence | ||||
Cafeteria Costs | ||||
Total Costs |
b. The allocations are made in the reverse order (starting with Cafeteria). (Negative amounts should be indicated by a minus sign. Do not round intermediate calculations.)
To | |||||
From | Cafeteria | Maintanence | Machining | Assembly | |
Service Department Costs | |||||
Cafeteria | |||||
Maitanence |
Total Costs |
Related Book For
Fundamentals of Cost Accounting
ISBN: 978-1259565403
5th edition
Authors: William Lanen, Shannon Anderson, Michael Maher
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