The Merchant Manufacturing Company has two service departments - purchasing and maintenance, and two production departments-fabrication and
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Question:
The Merchant Manufacturing Company has two service departments - purchasing and maintenance, and two production departments-fabrication and assembly. The distribution of each service department's efforts to the other departments is shown below:
FROM | TO Purchasing | TO Maintenance | TO Fabrication | TO Assembly |
---|---|---|---|---|
Purchasing | Maintenance | Fabrication | Assembly | |
Purchasing | 0% | 60% | 10% | 30% |
Maintenance | 20% | 0% | 30% | 50% |
The direct operating costs of the departments (including both variable and fixed costs) were as follows:
Purchasing | $96,000 |
Maintenance | 18,000 |
Fabrication | 72,000 |
Assembly | 48,000 |
The total cost accumulated in the assembly department using the step method is (calculate all ratios and percentages to 4 decimal places, for example 33.3333%, and round all dollar amounts to the nearest whole dollar):
a. $104,500.
b. $109,950.
c. $124,050.
d. $130,750.
e. $136,500.
Related Book For
Managerial Accounting A Focus on Ethical Decision Making
ISBN: 978-0324663853
5th edition
Authors: Steve Jackson, Roby Sawyers, Greg Jenkins
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