Warren Ltd. has two production departments, Maintenance and Cafoteria. Direct he

Question

Warren Ltd. has two production departments, Maintenance and Cafoteria. Direct he various departments for the month of June folow departrerts, Buiding Aand Buiding Bard hwo service departments, oosts for each department and the proportion of service costs used by Used Building A $490,000 Building B Maintenance 198,000 Cafeteria 319,000 0.2 0.5 02 0.3 0.1 157,000 0.7 Required: Use the step method to allocate the service costs, using the following starts with Maintenanoe. (Do not (a)The arder of allocation starts with Maintenance. (Do not round intermediate calculations. Round your answers to the nearest dollar amount) Service department costs Cafeteria Total Costs 0 S b)The allocations are made i in the reverse order (starting with Cafeteria). (Do not round intermediate caloulations. Round your answers to the nearest dollar amount.)

Explanation / Answer

Part A Department Maintenance Cafeteria Building A Building B Service Department Cost 1,98,000 1,57,000 Maintenance (1,98,000) 39,600 99,000 59,400 Cafeteria (1,96,600) 1,31,067 65,533 Total Cost 0 0 2,30,067 1,24,933 Part B Department Cafeteria Maintenance Building A Building B Service Department Cost 1,57,000 1,98,000 Cafeteria (1,57,000) 1,09,900 31,400 15,700 Maintenance (3,07,900) 1,92,438 1,15,463 Total Cost 0 0 2,23,838 1,31,163

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