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 Machining?

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 Machining?

8. Under the direct method, how much of the total allocable cost attributable to IT should be allocated to Assembly?
 

Transcribed Image Text:

Background information for all problems: 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: Total manufacturing costs COSTS Plant maintenance $500,000 Information systems $450,000 Machining $2,000,000 Assembly $3,150,000 $6,100,000 Computer Square Feet hours Plant maintenance 4,000.00 8,000.00 Information systems 2,000.00 4,000.00 Machining 12,000.00 24,000.00 Assembly 6,000.00 8,000.00 24,000.00 44,000.00 Background information for all problems: 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: Total manufacturing costs COSTS Plant maintenance $500,000 Information systems $450,000 Machining $2,000,000 Assembly $3,150,000 $6,100,000 Computer Square Feet hours Plant maintenance 4,000.00 8,000.00 Information systems 2,000.00 4,000.00 Machining 12,000.00 24,000.00 Assembly 6,000.00 8,000.00 24,000.00 44,000.00

Answer rating: 100% (QA)

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