Caro Manufacturing has two production departments, Machining and Assembly, and two service departments, Maintenance and Cafeteria....

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Caro Manufacturing has two production departments, Machining and Assembly, and two service departments, Maintenance and Cafet

Required: How much of the service department costs allocated to Machining and Assembly in the direct method should be allocat

Maintenance Cafeteria Machining Assembly Department Machining Assembly Maintenance Cafeteria Direct costs $125,eee 69, eee 49

business accounting

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Answer 1

Answer #1

Direct Method:

	To
	Maintenance	Cafetaria	Machining	Assembly
Direct Costs	$ 42,400	$ 34,000
Maintenance Cost allocated	(42,400)	0	31,800	10,600
Cafetaria Cost Allocated	0	(34,000)	17,000	17,000
Totals	$ 0	$ 0	$ 48,800	$ 27,600

Department rate for Machining Department = $ 48,800 / 300 machine hours = $ 162.67

Department rate for Assembly Department = $ 27,600 / 350 = $ 78.86

	Job -CM-22	Job CM-23
Machining	$ 45,548	$ 3,253
Assembly	3,154	24,447

Step Method:

	To
	Maintenance	Cafetaria	Machining	Assembly
Service Department Costs	$ 49,000	$ 41,000
Maintenance	(49,000)	9,800	$ 24,500	$ 14,700
Cafetaria	0	( 50,800)	33,866.67	16,933.33
Total Costs	$ 0	$ 0	$ 58,366.67	$ 31,633.33

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Answer 2

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