Fact Pattern: The managers of Rochester Manufacturing are discussing ways to allocate the cost of service departments, such as Quality Control and Maintenance, to the production departments. To aid them in this discussion, the controller has provided the following information Quality Control Maintenance Machining Assembly Total $350,000 $200,000 $300,000 Budgeted overhead costs before allocation Budgeted machine hours Budgeted direct labor hours Budgeted hours of service) Quality Control Maintenance OA. $80,000 OB. $87,500 OC. $120,000 OD. $167,500 $400,000 50,000 7,000 25,000 21,000 7,000 10,000 18,000 12,000 If Rochester uses the direct method of allocating service department costs, the total service costs allocated to the assembly department would be $1,250,000 50,000 25,000 35,000 40,000
Fact Pattern: The managers of Rochester Manufacturing are discussing ways to allocate the cost of service departments, such as Quality Control and Maintenance, to the production departments. To aid them in this discussion, the controller has provided the following information Quality Control Maintenance Machining Assembly Total $350,000 $200,000 $300,000 Budgeted overhead costs before allocation Budgeted machine hours Budgeted direct labor hours Budgeted hours of service) Quality Control Maintenance OA. $80,000 OB. $87,500 OC. $120,000 OD. $167,500 $400,000 50,000 7,000 25,000 21,000 7,000 10,000 18,000 12,000 If Rochester uses the direct method of allocating service department costs, the total service costs allocated to the assembly department would be $1,250,000 50,000 25,000 35,000 40,000
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Fact Pattern:
The managers of Rochester Manufacturing are discussing ways to allocate the cost of service departments, such as Quality Control and
Maintenance, to the production departments. To aid them in this discussion, the controller has provided the following information
Quality Control Maintenance Machining
Assembly
Total
$350,000
$200,000
Budgeted overhead costs
before allocation
Budgeted machine hours
Budgeted direct labor hours
Budgeted hours of service:
Quality Control
Maintenance
$400,000
50,000
7,000
$300,000 $1,250,000
50,000
25,000
25,000
21,000
7,000
10,000
18,000
12,000
If Rochester uses the direct method of allocating service department costs, the total service costs allocated to the assembly department would be
OA. $80,000
OB. $87,500
OC. $120,000
O D. $167,500
35,000
40,000
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