Question

Required information [The following information applies to the questions displayed below.] Caro Manufacturing has two production...

Required information

[The following information applies to the questions displayed below.]

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:

Proportion of Services Used by
Department Direct Costs Maintenance Cafeteria Machining Assembly
Machining $ 92,000
Assembly 62,400
Maintenance 38,800 0.2 0.6 0.2
Cafeteria 31,000 0.8 0.1 0.1

Required:

Compute the allocation of service department costs to producing departments using the direct method. (Do not round intermediate calculations.)

Total Costs
Machining
Assembly
0 0
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Answer #1

Solution Calculation of service department costa : Department Machining Allocated 92000 Assembly 62400 9500 (38000X 48) MaintTotal cost 44000 Machining (28500 + 15500) Assembly (9500 + 15500) 25000

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