The Merchant Manufacturing Company has two service departments — purchasing and maintenance, and two production departments — fabrication and assembly. The distribution of each service department's efforts to the other departments is shown below: FROM TO Purchasing Maintenance Fabrication Assembly Purchasing 0 % 35 % 35 % 30 % Maintenance 65 % 0 % 20 % 15 % The direct operating costs of the departments (including both variable and fixed costs) were as follows: Purchasing $ 144,000 Maintenance 66,000 Fabrication 120,000 Assembly 96,000 The total cost accumulated in the fabrication department using the step method is (assume the purchasing department goes first; calculate all ratios and percentages to 4 decimal places, for example 33.3333%, and round all dollar amounts to the nearest whole dollar): Multiple Choice a. $231,464. b. $236,914. c. $189,086. d. $195,786. e. $201,536.
The Merchant Manufacturing Company has two service departments — purchasing and maintenance, and two production departments — fabrication and assembly. The distribution of each service department's efforts to the other departments is shown below: FROM TO Purchasing Maintenance Fabrication Assembly Purchasing 0 % 35 % 35 % 30 % Maintenance 65 % 0 % 20 % 15 % The direct operating costs of the departments (including both variable and fixed costs) were as follows: Purchasing $ 144,000 Maintenance 66,000 Fabrication 120,000 Assembly 96,000 The total cost accumulated in the fabrication department using the step method is (assume the purchasing department goes first; calculate all ratios and percentages to 4 decimal places, for example 33.3333%, and round all dollar amounts to the nearest whole dollar): Multiple Choice a. $231,464. b. $236,914. c. $189,086. d. $195,786. e. $201,536.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
The Merchant Manufacturing Company has two service departments — purchasing and maintenance, and two production departments — fabrication and assembly. The distribution of each service department's efforts to the other departments is shown below:
| FROM | TO | |||||||||||
| Purchasing | Maintenance | Fabrication | Assembly | |||||||||
| Purchasing | 0 | % | 35 | % | 35 | % | 30 | % | ||||
| Maintenance | 65 | % | 0 | % | 20 | % | 15 | % | ||||
The direct operating costs of the departments (including both variable and fixed costs) were as follows:
| Purchasing | $ | 144,000 | |
| Maintenance | 66,000 | ||
| Fabrication | 120,000 | ||
| Assembly | 96,000 | ||
The total cost accumulated in the fabrication department using the step method is (assume the purchasing department goes first; calculate all ratios and percentages to 4 decimal places, for example 33.3333%, and round all dollar amounts to the nearest whole dollar):
Multiple Choice
a. $231,464.
b. $236,914.
c. $189,086.
d. $195,786.
e. $201,536.
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