Question

Obj. 3 Sharon's Bakery produces three kinds of homemade bread: whole wheat, honey quinoa, and sourdough. The bread is produced in the Mixing and Baking departments. Other indirect or supportive costs of production include Janitorial and Maintenance services. Janitorial and Maintenance costs are allocated to the Mixing and Baking departments based on square feet and machine hours, respectively. Sharon has noted that the area where maintenance equipment is stored is about 1,000 square feet, and that the size of the Mixing and Baking departments is about 2,300 and 1,700 square feet, respectively. Sharon knows that the recorded machine hours for the Mixing and Baking departments combined was 5,000 hours, and that the Mixing Department ran machines about 200 hours more than the Baking Department. The total costs of cach department were as follows: Janitorial Department Maintenance Department Mixing Department Baking Department $ 4,000 3,300 17,700 14,000 Determine the total cost of each production department after allocating all support department costs using the scqucntial method.

Answer 1

	Service Departments	Operating Departments
	Jantorial	Maintenance	Mixing	Baking
	Department	Department	Department	Department
Department cost before allocation        $	4,000	3,300	17,700	14,000
Allocation
Department Jantorial cost	-4000	800	1840	1360
10 23 17 50 50 50
Department Maintenance cost		-4,100	2132	1968
26 24, 50 50
Total cost after allocation			21,672	17,328
Allocation ratio
Department Jantorial in ratio of	Jantorial	Maintenance	Mixing	Baking
on square feet basis		1000	2300	1700
		10 50	23 50	17 50
Department Maintenance in raio			2600Hrs	2400hrs
of Machinr hour			26 50	24 50

Total machine hours 5,000
Mixing department 200 Hrs more
Let Baking Dep. Runs X Hrs
Mixing Dep. X+200
x+x+200=5000
X=2400 Hrs (Baking Dept)
Mixing dept 2400+200=2600hrs