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Spirits and More operates two departments, Cutting and Fabrication. Two service departments, maintenance and purchasing, are also included within the company. The operating costs and distribution of each service department's efforts to the other departments is as follows:   Maintenance Purchasing Operating Costs Maintenance 0% 25% $87,000 Purchasing 35% 0% 16,000 Cutting 15% 60% 80,000 Fabrication 50% 15% 56,000 Using the direct method of allocating support costs, what is the total cost accumulated in the fabrication department?   Question options:   a)  $56,000.00   b)  Maintenance Purchasing Costs   c)  $70,123.00   d)  $77,750.00   e)  $126,123.00

Spirits and More operates two departments, Cutting and Fabrication. Two service departments, maintenance and purchasing, are also included within the company. The operating costs and distribution of each service department's efforts to the other departments is as follows:   Maintenance Purchasing Operating Costs Maintenance 0% 25% $87,000 Purchasing 35% 0% 16,000 Cutting 15% 60% 80,000 Fabrication 50% 15% 56,000 Using the direct method of allocating support costs, what is the total cost accumulated in the fabrication department?   Question options:   a)  $56,000.00   b)  Maintenance Purchasing Costs   c)  $70,123.00   d)  $77,750.00   e)  $126,123.00

Managerial Accounting
Managerial Accounting
15th Edition
ISBN:9781337912020
Author:Carl Warren, Ph.d. Cma William B. Tayler
Publisher:Carl Warren, Ph.d. Cma William B. Tayler
Chapter5: Support Department And Joint Cost Allocation
Section: Chapter Questions
Problem 1BE: Charlies Wood Works produces wood products (e.g., cabinets, tables, picture frames, and so on)....
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Spirits and More operates two departments, Cutting and Fabrication. Two service departments, maintenance and purchasing, are also included within the company. The operating costs and distribution of each service department's efforts to the other departments is as follows:

  Maintenance Purchasing Operating Costs
Maintenance 0% 25% $87,000
Purchasing 35% 0% 16,000
Cutting 15% 60% 80,000
Fabrication 50% 15% 56,000

Using the direct method of allocating support costs, what is the total cost accumulated in the fabrication department?

 

Question options:

 

a) 

 $56,000.00
 

b) 

 Maintenance Purchasing Costs
 

c) 

 $70,123.00
 

d) 

 $77,750.00
 

e) 

 $126,123.00
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