Question: Using the direct method, Samantha Company allocates Maintenance Department costs based on square footage serviced, and it services the Cutting and Assembly departments. It allocates
Using the direct method, Samantha Company allocates Maintenance Department costs based on square footage serviced, and it services the Cutting and Assembly departments. It allocates Cafeteria Department costs based on the number of employees served in the Cutting and Assembly departments.
| It has the following information about its two service departments and two production departments, Cutting and Assembly Square Footage is listed first:
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| Maintenance Department | 1,500 | 20 | |
| Cafeteria Department | 2,000 | 10 | |
| Cutting Department | 2,000 | 60 | |
| Assembly Department | 8,000 | 20 | |
a. What is the percentage (proportional) usage of the Maintenance Department by the Cutting Department?
b. What is the percentage (proportional) usage of the Maintenance Department by the Assembly Department?
c. If Samantha Company has $100,000 of Maintenance Department costs, how much is allocated to the Cutting Department, and how much is allocated to the Assembly Department?
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