The managers of Yoyodyne Propulsion Systems are discussing ways to allocate the cost of support departments...

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The managers of Yoyodyne Propulsion Systems are discussing ways to allocate the cost of support departments such as Quality c

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Answer 1

Answer #1

Under direct method, the service departments cost will be allocated to production departments, without considering the services incurred on other service departments,

Total units served by quality control will be 21000 + 7000 = 28000, and therefore the cost allocated to assembly department will be 350,000 x 7000 ÷ 28000 = 87,500, and

Total units served by maintenance department will be 18000 + 12000 = 30000, therefore cost allocated to assembly department will be 200,000 x 12000 ÷ 30000 = 80,000.

Therefore the answer is 87,500 + 80,000 = 167,500.

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Answer 2

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