Section A: Cost Allocation ASU Manufacturing Company has two production departme

Question

Section A: Cost Allocation ASU Manufacturing Company has two production departments, Machining and Assembly, 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 December follow Direct Costs Maintenance Cafeteria Machining Assembly Department Machining .$99,000 Assembling..64,400 Maintenance 40,000 0.2 0.5 0.3 32,000 0.8 0.1 0.1 ompute the allocation of service department costs to producing departments using the direct ethod.

Explanation / Answer

Machining Assembly Maintenance Cafeteria Direct Costs 99000 64400 40000 32000 Service department Costs allocated: Maintenance 25000 15000 -40000 Cafeteria 16000 16000 -32000 Total costs 140000 95400 0 0

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