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12. (20 points) General Factory Administration and Maintenance are service departments in the Waterbury Box Company. Management has decided to allocate maintenance costs on the
12. (20 points) General Factory Administration and Maintenance are service departments in the Waterbury Box Company. Management has decided to allocate maintenance costs on the basis of the area in each department and general factory administration costs on the basis of labor hours the employees worked in each of their respective departments. The following data appears in the company records for the current period: a. Why are service department costs allocated to producing departments? b. Use the direct method to allocate service department costs to the operating departments. What are the total costs for Cutting and Assembly after allocation? c. Use the step method to allocate service department costs to the operating departments, starting with general factory administration. What are the total costs for Cutting and Assembly after allocation
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