File Edit View Hstory Bookmarks People Window Help Chapter 11 Homework D Not Sec

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File Edit View Hstory Bookmarks People Window Help Chapter 11 Homework D Not Secure 57% Frl Apr 13 4.50 pu a o Caro Has Two PX D Not Secure Caro Manufacturing has two production departments, Machining and Assembly, and two servioe departments, Maintenance and Cafeteria. Direct costs for each department and the proportion of service costs used by the various departments for the month of August follow Proportion of Services Used Cafeteria Machining Assembly 130,000 68,000 54,000 43,000 0.7 0.2 0.5 0.2 0.3 0.1 Cafeberia Required: Use the step method to allocate the service costs, using the following: a. The order of allocation starts with Maintenance. (Negative amounts should be indicated by a minus sign. Do not round intermadiate calculations.) 54,000 10.800 27,000 35,867 7,933 062,867 34,133 Total Costs calculations? b. The allocations are made in the reverse order (starting with Cafeteria). (Negative amounts should be Indicated by a minus sign. Do not round intermediate 43,000f 54,000 (43,000) Service department costs Cafeteria (84,100) Total Costs

Explanation / Answer

Req a: Allocation Statement: From Maintenance Cafeteria Machining Assembly Service department cost 54000 43000 Add: maintenance -54000 10800 27000 16200 (0.2:0.5:0.3) Add: Cafeteria 0 -53800 35867 17933 (0.2 : 0.1) Total costs 0 0 62867 34133 Req b: Allocation Statement: From Maintenance Cafeteria Machining Assembly Service department cost 54000 43000 Add: Cafeteria 30100 -43000 8600 4300 (0.7:0.2:0.1) Add: Maintenance -84100 0 52562.5 31537.5 ( 0.5: 0.3) Total costs 0 0 61162.5 35837.5

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