Midland Resources has two production departments (Fabrication and Assembly) and three service departments (Engineering,Administration, and Maintenance). During July, the following costs and service department usage ratios were recorded.SupplyingDepartmentEngineeringAdministrationMaintenanceDirect costEngineeringAdministrationMaintenanceUsing DepartmentEngineering Administration Maintenance FabricationTotal010%0$30,00050%030%Costs$213,300Allocated to:Fabrication020%0$40,000Required:Allocate the service department costs to the two operating departments using the reciprocal method. (Do not round intermediatecalculations.)Assembly10%50%15%$200,000Assembly40%20%55%$50,000

Name: Midland Resources has two production departments (Fabrication and Ass
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Description: Midland Resources has two production departments (Fabrication and Assembly) and three service departments (Engineering,Administration, and Maintenance). During July, the following costs and service department usage ratios were recorded.SupplyingDepa

Reciprocal method is a method to allocate cost of service deepartment . Under this menthod a set…

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Midland Resources has two production departments (Fabrication and Assembly) and three service departments (Engineering, Administration, and Maintenance). During July, the following costs and service department usage ratios were recorded. Supplying Department Engineering Administration Maintenance. Direct cost Engineering Administration Maintenance Engineering 0 10% 0 Total $30,000 Using Department Administration Maintenance Costs 50% 0 30% $213,300 Allocated to: Fabrication 0 20% 0 $40,000 Assembly Fabrication Required: Allocate the service department costs to the two operating departments using the reciprocal method. (Do not round intermediate calculations.) 10% 50% 15% $200,000 Assembly 40% 20% 55% $50,000

Midland Resources has two production departments (Fabrication and Assembly) and three service departments (Engineering, Administration, and Maintenance). During July, the following costs and service department usage ratios were recorded. Supplying Department Engineering Administration Maintenance. Direct cost Engineering Administration Maintenance Engineering 0 10% 0 Total $30,000 Using Department Administration Maintenance Costs 50% 0 30% $213,300 Allocated to: Fabrication 0 20% 0 $40,000 Assembly Fabrication Required: Allocate the service department costs to the two operating departments using the reciprocal method. (Do not round intermediate calculations.) 10% 50% 15% $200,000 Assembly 40% 20% 55% $50,000

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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