Warren Ltd. has two production departments, Building A and Building B, 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 June follow:

Required
Compute the allocation of service department costs to producing departments using the directmethod.

Transcribed Image Text:

Proportion of Services Used by Departmen Direct Costs Maintenance Cafeteria Building A Building B Building A Building B Maintenance Cafeteria $990,000 644,000 400,000 320,000 0.5 0.1 0.3 0.1 0.2 0.8