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: Department Machining Assembly Maintenance Cafeteria Machining Assembly Direct Costs $92,000 62,400 38,800 31,000 Total Costs Proportion of Services Used by Maintenance Cafeteria. Machining 9.8 0.2 quired: mpute the allocation of service department costs to producing departments using the direct method. (Do not round intermediat Iculations.) Prev 0.6 0.1 1 2 Assembly of 13 0.2 0.1 Next > 3

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: Department Machining Assembly Maintenance Cafeteria Machining Assembly Direct Costs $92,000 62,400 38,800 31,000 Total Costs Proportion of Services Used by Maintenance Cafeteria. Machining 9.8 0.2 quired: mpute the allocation of service department costs to producing departments using the direct method. (Do not round intermediat Iculations.) Prev 0.6 0.1 1 2 Assembly of 13 0.2 0.1 Next > 3

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Mack Precision Tool and Die has two production departments, Fabricating and Finishing, and two service departments, Repair and Quality Control. Direct costs for each department and the proportion of service costs used by the various departments for the month of March follow: Proportion of Services Used by Department Fabricating Direct Costs Repair $ 132,600 Quality Control Fabricating Finishing Finishing 94,200 Repair 40,200 0 0.2 0.5 0.3 Quality Control 75,000 0.8 0 0.1 0.1 Required: Use the step method to allocate the service costs, using the following: a. The order of allocation starts with Repair. b. The allocations are made in the reverse order (starting with Quality Control).
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