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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 Direct Costs $110,000 68,000 55,000 36,000 Proportion of Services Used by Maintenance Cafeteria Machining 0.7 0.2 0.5 0.1 Assembly 0.3 0.2 Required: Use the reciprocal method to allocate the service costs. (Matrix algebra is not required.) (Negative amounts should be indicated by a minus sign. Do not round intermediate calculations. Round your final answers to the nearest whole dollar amounts.)

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 Direct Costs $110,000 68,000 55,000 36,000 Proportion of Services Used by Maintenance Cafeteria Machining 0.7 0.2 0.5 0.1 Assembly 0.3 0.2 Required: Use the reciprocal method to allocate the service costs. (Matrix algebra is not required.) (Negative amounts should be indicated by a minus sign. Do not round intermediate calculations. Round your final answers to the nearest whole dollar amounts.)

FINANCIAL ACCOUNTING
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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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 Direct Costs $110,000 68,000 55,000 36,000 From: Service department costs Maintenance Cafeteria Total Maintenance Cafeteria Machining Proportion of Services Used by 0.7 $ Maintenance $ Required: Use the reciprocal method to allocate the service costs. (Matrix algebra is not required.) (Negative amounts should be indicated by a minus sign. Do not round intermediate calculations. Round your final answers to the nearest whole dollar amounts.) 55,000 0.2 - 55,000 $ Cost Allocation To: Cafeteria Machining 0.5 0.1 $ 0 $ Assembly 0.3 0.2 Assembly 0 $ 0 $ 0 0
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: Department Machining Assembly Maintenance Cafeteria Direct Costs $110,000 68,000 55,000 36,000 From: Service department costs Maintenance Cafeteria Total Maintenance Cafeteria Machining Proportion of Services Used by 0.7 $ Maintenance $ Required: Use the reciprocal method to allocate the service costs. (Matrix algebra is not required.) (Negative amounts should be indicated by a minus sign. Do not round intermediate calculations. Round your final answers to the nearest whole dollar amounts.) 55,000 0.2 - 55,000 $ Cost Allocation To: Cafeteria Machining 0.5 0.1 $ 0 $ Assembly 0.3 0.2 Assembly 0 $ 0 $ 0 0
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