Question 6.4 Krum Lawn Equipment has five departments, of which Casting and Finishing are producing departments. Maintenance, Product Movement, and Inspection are service departments. The distribution of the service departments is as follows: Service Costs Services provided to: Maint. Prod. Move. Insp. Cast. Finish. Maintenance $84,000 5% 25% 50% 20% Product movement 160,000 10% 5 45 40 Inspection 38,000 15 5 20 60 Required Use the direct method to allocate the service departments' costs. Prepare a schedule showing the total costs allocated to each department.
Question 6.4
Krum Lawn Equipment has five departments, of which Casting and Finishing are producing departments. Maintenance, Product Movement, and Inspection are service departments. The distribution of the service departments is as follows:
Service Costs Services provided to:
Maint. Prod. Move. Insp. Cast. Finish.
Maintenance $84,000 5% 25% 50% 20%
Product movement 160,000 10% 5 45 40
Inspection 38,000 15 5 20 60
Required
- Use the direct method to allocate the service departments' costs. Prepare a schedule showing the total costs allocated to each department.
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