Kim&Co.
During the past month, the following costs were incurred in the three production departments and two service departments of Kim & Co.:
| Using Department | ||||||||||||||||
| Supplying Department | Administration | Factory Support | Fabrication | Assembly | Finishing | |||||||||||
| Administration | − | 0.40 | 0.30 | 0.20 | 0.10 | |||||||||||
| Factory support | 0.15 | − | 0.15 | 0.15 | 0.55 | |||||||||||
| Direct cost | $ | 680,000 | $ | 1,350,000 | $ | 1,760,000 | $ | 288,000 | $ | 258,000 | ||||||
Required:
Allocate service department costs to Fabrication, Assembly, and Finishing using the reciprocal method, and determine the total costs of Fabrication, Assembly, and Finishing after this allocation. (Negative amounts should be indicated by a minus sign. Do not round intermediate calculations. Round your final answers to the nearest whole dollar amounts.)
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Administration, and Maintenance). During July, the following costs
and service department usage ratios were recorded:
Supplying Department
Using Department
Engineering
Administration
Maintenance
Fabrication
Assembly
Engineering
0
60
%
0
20
%
20
%
Administration
15
%
0
10
%
50
%
25
%
Maintenance
0
20
%
0
20
%
60
%
Direct cost
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Required:
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Midland Resources has two production departments (Fabrication
and Assembly) and three service departments (Engineering,
Administration, and Maintenance). During July, the following costs
and service department usage ratios were recorded:
Supplying Department
Using Department
Engineering
Administration
Maintenance
Fabrication
Assembly
Engineering
0
60
%
0
20
%
20
%
Administration
15
%
0
10
%
50
%
25
%
Maintenance
0
20
%
0
20
%
60
%
Direct cost
$
58,000
$
329,000
$
50,000
$
270,000
$
90,000
Required:
Allocate...
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