Logan Products has two production departments-assembly and finishing. These are supported by two service departments-sourcing (purchasing...

  

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Logan Products has two production departments-assembly and finishing. These are supported by two service departments-sourcing (purchasing and handling of materials and human resources) and operations (work scheduling, supervision, and inspection). Logan has the following labor hours devoted by each of the service departments to the other departments. Departments Sourcing Operations Assembly Finishing Total Sourcing Operations The costs incurred in the plant are as follows: a. Direct Method Assembly Finishing b. Step Method Total Labor Hours Used by Departments Assembly 40,000 60,000 Sourcing 10,000 Assembly Finishing c. Reciprocal Method Assembly Finishing Operations. 20,000 Departmental Costs Required: 1. What are the costs allocated to the two production departments using (a) the direct method, (b) the step method, when the sourcing department that provides the greatest percentage of services to other service departments goes first, and (c) the reciprocal method? 2. What are the total costs in the production departments after allocation? (For all requirements, do not round intermediate calculations. Round your final answers to nearest whole dollar amount.) $ 195,000 255,000 430,000 275,000 $ 1,155,000 Total Service Department Cost Allocated Total Production Cost $ Finishing 60,000 50,000 661,000 494,273 Logan Products has two production departments-assembly and finishing. These are supported by two service departments-sourcing (purchasing and handling of materials and human resources) and operations (work scheduling, supervision, and inspection). Logan has the following labor hours devoted by each of the service departments to the other departments. Departments Sourcing Operations Assembly Finishing Total Sourcing Operations The costs incurred in the plant are as follows: a. Direct Method Assembly Finishing b. Step Method Total Labor Hours Used by Departments Assembly 40,000 60,000 Sourcing 10,000 Assembly Finishing c. Reciprocal Method Assembly Finishing Operations. 20,000 Departmental Costs Required: 1. What are the costs allocated to the two production departments using (a) the direct method, (b) the step method, when the sourcing department that provides the greatest percentage of services to other service departments goes first, and (c) the reciprocal method? 2. What are the total costs in the production departments after allocation? (For all requirements, do not round intermediate calculations. Round your final answers to nearest whole dollar amount.) $ 195,000 255,000 430,000 275,000 $ 1,155,000 Total Service Department Cost Allocated Total Production Cost $ Finishing 60,000 50,000 661,000 494,273

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1a Service Department Cost Allocation Direct Method From Service Department Production Departments S... View the full answer