Caro Manufacturing 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 August follow: Proportion of Services Used by Department Machining Direct Costs $105,000 Maintenance Cafeteria Machining Assembly Assembly 67,000 Maintenance 45,000 0.1 0.6 0.3 Cafeteria 40,000 0.8 0.1 0.1 Required: Use the step method to allocate the service costs, using the following: a. The order of allocation starts with Maintenance. b. The allocations are made in the reverse order (starting with Cafeteria). Complete this question by entering your answers in the tabs below.
Caro Manufacturing 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 August follow: Proportion of Services Used by Department Machining Direct Costs $105,000 Maintenance Cafeteria Machining Assembly Assembly 67,000 Maintenance 45,000 0.1 0.6 0.3 Cafeteria 40,000 0.8 0.1 0.1 Required: Use the step method to allocate the service costs, using the following: a. The order of allocation starts with Maintenance. b. The allocations are made in the reverse order (starting with Cafeteria). Complete this question by entering your answers in the tabs below.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Transcribed Image Text:Caro Manufacturing 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
August follow:
Proportion of Services Used by
Department
Machining
Assembly
Direct
Costs
$105,000
67,000
Maintenance Cafeteria
Machining
Assembly
Maintenance
45,000
0.1
Cafeteria
40,000
0.8
0.6
0.1
0.3
0.1
S
Required:
Use the step method to allocate the service costs, using the following:
a. The order of allocation starts with Maintenance.
b. The allocations are made in the reverse order (starting with Cafeteria).
Complete this question by entering your answers in the tabs below.
Required A
Required B
The order of allocation starts with Maintenance. (Negative amounts should be indicated by a minus sign. Do not round
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