The Merchant Manufacturing Company has two service departments — purchasing and maintenance, and two production departments...
The Merchant Manufacturing Company has two service departments — purchasing and maintenance, and two production departments — fabrication and assembly. The distribution of each service department's efforts to the other departments is shown below:
| FROM | TO | |||||||||||
| Purchasing | Maintenance | Fabrication | Assembly | |||||||||
| Purchasing | 0 | % | 25 | % | 55 | % | 20 | % | ||||
| Maintenance | 55 | % | 0 | % | 30 | % | 15 | % | ||||
The direct operating costs of the departments (including both variable and fixed costs) were as follows:
| Purchasing | $ | 150,000 | |
| Maintenance | 72,000 | ||
| Fabrication | 126,000 | ||
| Assembly | 102,000 | ||
The total cost accumulated in the fabrication department using the direct method is (calculate all ratios and percentages to 4 decimal places, for example 33.3333%, and round all dollar amounts to the nearest whole dollar):
Multiple Choice
-
$299,250.
-
$284,000.
-
$166,000.
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$126,000.
-
$358,500.
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