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Caro Manufacturing has two production departments, Machining and Assembly, and two service departments, Maintenance and Cafeteria. Direct costs for cach department and the proportion of service costs used by the various departments for the month of Augu of Services Used Direct Costs CafeteriaMachining Maintenance Cafeteris 72,000 54,000 35,000 0.2 0.2 0.7 0.1 Required Use the step method to allocate the service costs, using the following: a. The order of alocation starts with Maintenance (Negative amounts should be indicated by a minus sign. Do not round intermediato calculations.) From S 54,0035,0005,000 S 72,000 10,800 Service department costs 54,000 5,400 37,800 Cafetaria (40,400) Total Costs 152,800 S 2.800 b. The allocations are made in the reverse order (starting with Cafeteria). (Negative amounts should be indicated by a minus sign. Do not round intermediate calculations.) From Cafeteria ri Maintenance Service department costs Caleteria Total Costs

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Total Cost can be rounded per question requirement (e.g. nearest dollar or 2 decimal places) Solution: a) Assuming, Maintenace department allocated first: Service Department Operating Department Maintenace Cafeteria Machining Assembly From Service Department costs Maintenance Cateteria Total Cost $ 54,000 $ 35,000 $ -54,000$ 5,400 -40,400 37,800 10,800 13,467 $ 26,933 $ 51,267 37,733 $51,266.67 $37,733.33 (40400/3)*1& 2 OR: b)Assuming, Cafeteria department allocated first: Service Department Operating Department Cafeteria Maintenace MachiningAssembly From Service Department costs Cateteria Maintenance Total Cost S 35,000 54,000 $ -35,000$ 24,500 $ 3,500$ 7,000 61,056 $ 17,444 64,556 24,444 $64,555.56 $24,444.44 (78500)/9*7& 2 $ -78,500$ OR:

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