Question

Required information Exercise 11-27 & 11-28 (Static) (LO 11-2) [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 Direct Maintenance Cafeteria Machining Assembly Department Machining Assembly Maintenance Cafeteria $99.000 64,400 48.800 32,680 Exercise 11-28 (Static) Allocating Service Department Costs First to Production Departments and then to Jobs (LO 11-2) Assume that both Machining and Assembly work on just two jobs during the month of August. CM-22 and CM-23. Costs are allocated to jobs based on machine-hours in Machining and labor-hours in Assembly. The number of labor and machine-hours worked in each department are as follows: Machining Assembly Job CM-22: Machine-hour's Labor-hours Machine-hours Labor-hours Job CM-23; 30 33 278 Required: How much of the service department costs allocated to Machining and Assembly in the direct method should be allocated to Job CM- 222 How much should be allocated to Job CM-23? (Do not round intermediate calculations. Round your final answers to the nearest whole dollar amounts.)

Answer 1

Solution:

- Calculation of service department costs Department Machining Assembly Allocated 99000 64400 Maintenance 25000 (10000 **) 15000(4000043 - Cafeteria 16000 (32000x16000 (32000x| Total $ 140000 $95400 Total cost under direct method.is connect. Machining = $25000 +$16000 = $41000 Assembly = $15000 +$ (6000 = $31000