Christmas Timber, Inc., produces Christmas trees. The trees are produced through a cutting and pruning process. Machine maintenance and janitorial labors are performed throughout the production process by nonproduction employees. Maintenance and janitorial costs are allocated based on machine hours used and the number of trees in each department, respectively. The company estimates that the cutting and pruning areas typically have about 7 and 63 trees, respectively, in them at 1 time. The company also estimates that the cutting process requires about 9 times as many machine hours as the pruning process. The total costs of each department are as follows: Line Item Description Amount Maintenance Department $7,000 Janitorial Department 6,000 Cutting Department 56,000 Pruning Department 13,000 Using the direct method of support department cost allocation, determine the total cost of each production department after allocating all support costs to the production departments. Line Item Description CuttingDepartment PruningDepartment Production departmentsʼ total costs $fill in the blank 1 $fill in the blank 2
Christmas Timber, Inc., produces Christmas trees. The trees are produced through a cutting and pruning process. Machine maintenance and janitorial labors are performed throughout the production process by nonproduction employees. Maintenance and janitorial costs are allocated based on machine hours used and the number of trees in each department, respectively. The company estimates that the cutting and pruning areas typically have about 7 and 63 trees, respectively, in them at 1 time. The company also estimates that the cutting process requires about 9 times as many machine hours as the pruning process. The total costs of each department are as follows: Line Item Description Amount Maintenance Department $7,000 Janitorial Department 6,000 Cutting Department 56,000 Pruning Department 13,000 Using the direct method of support department cost allocation, determine the total cost of each production department after allocating all support costs to the production departments. Line Item Description CuttingDepartment PruningDepartment Production departmentsʼ total costs $fill in the blank 1 $fill in the blank 2
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
Christmas Timber, Inc., produces Christmas trees. The trees are produced through a cutting and pruning process. Machine maintenance and janitorial labors are performed throughout the production process by nonproduction employees. Maintenance and janitorial costs are allocated based on machine hours used and the number of trees in each department, respectively. The company estimates that the cutting and pruning areas typically have about 7 and 63 trees, respectively, in them at 1 time. The company also estimates that the cutting process requires about 9 times as many machine hours as the pruning process. The total costs of each department are as follows:
| Line Item Description | Amount |
|---|---|
| Maintenance Department | $7,000 |
| Janitorial Department | 6,000 |
| Cutting Department | 56,000 |
| Pruning Department | 13,000 |
Using the direct method of support department cost allocation, determine the total cost of each production department after allocating all support costs to the production departments.
| Line Item Description | Cutting Department |
Pruning Department |
|---|---|---|
| Production departmentsʼ total costs | $fill in the blank 1 | $fill in the blank 2 |
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