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

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:


Department Direct Costs Maintenance Cafeteria Machining Assembly
Machining 99,000
Assembly 64,400
Maintenance 40,000 - 0.2 0.5 0.3
Cafeteria 32,000 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.)

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Answer #1

Service department allocation

Maintenance Cafeteria Machining Assembly
Service department cost 40000 32000
Maintenance allocation -40000 25000 15000
Cafeteria allocation -32000 16000 16000
Total Cost 0 0 41000 31000
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