ng has two pro
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Subject: acounting

Transcribed Image Text:Exercise 11-32 (Algo) Cost Allocation: Reciprocal Method (LO 11-4)
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
$135,000
66,000
49,000
43,000
Proportion of Services Used by
Maintenance Cafeteria Machining
From:
Service department costs
Maintenance
Cafeteria
Total
0.6
Maintenance
$
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.)
0 $
Cafeteria
0.5
0.2
Cost Allocation To:
Machining
0 $
Assembly
0.3
0.2
Assembly
0 $
0
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