[LO 7-3)7-35 Departmental Cost Allocation Marshfield Manufacturing has two production departments=assembly and finishing. These are supported by two service departments-sourcing (purchasingand handling of raw materials and human resources) and operations (work scheduling, supervision.and inspection). Marshfield has the following labor-hours devoted by each of the service depart-ments to the other departments.Total Labor-Hours Used by DepartmentsSourcingOperationsAssemblyFinishingSourcingOperations25,00045,00050,00070,00040,00010,000The costs incurred in the plant are as follows:DepartmentsDepartmental CostsSourcingOperationsAssemblyFinishing$134,000189,000398,500266,000$987,500TotalChapter 7 Cost Allocation: Deparıments, Joint Products, and By-Products 255Required Use 4 decimal places (c.g., 33.3333%) in your calculations.1. What are the costs allocated to the two production departments using (a) the direct method, (b) thestep method (with the sourcing department going first), and (c) the reciprocal method?2. What are the total costs in the production departments after allocation?

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Description: [LO 7-3)7-35 Departmental Cost Allocation Marshfield Manufacturing has two production departments=assembly and finishing. These are supported by two service departments-sourcing (purchasingand handling of raw materials and human resources) and opera

1 (a) ..... Under the direct method the cost of service departments are allotted only to the…

Answered: Total Labor-Hours Use Sourcing…

Business

Accounting

Total Labor-Hours Use Sourcing Operations 25,000 10,000 the plant are as follows: Departments Dep Sourcing

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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