Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

a. Caro Manufacturing has two production departments, Machining and Assembly, and two service departments, Maintenance and Cafeteria. Direct costs for each department and the proportion

a. Caro Manufacturing has two production departments, Machining and Assembly, and two service departments, Maintenance and Cafeteria. Direct costs for each department and the proportion of service costs used by the various departments for the month of August follow:

Proportion of Services Used by
Department Direct Costs Maintenance Cafeteria Machining Assembly
Machining $ 98,000
Assembly 74,400
Maintenance 46,000 0.2 0.6 0.2
Cafeteria 37,000 0.6 0.1 0.3

Exercise 11-27 (Algo) Cost Allocation: Direct Method (LO 11-2)

Required:

Compute the allocation of service department costs to producing departments using the direct method. (Do not round intermediate calculations.)

b. Assume that both Machining and Assembly work on just two jobs during the month of August: CM-22 and CM-23. Costs are allocated to jobs based on machine-hours in Machining and labor-hours in Assembly. The number of labor- and machine-hours worked in each department are as follows:

Machining Assembly
Job CM-22: Machine-hours 230 60
Labor-hours 20 20
Job CM-23: Machine-hours 20 40
Labor-hours 30 100

Required: How much of the service department costs allocated to Machining and Assembly in the direct method should be allocated to Job CM-22? How much should be allocated to Job CM-23?

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Finance For Non-Finance People

Authors: Sandeep Goel

2nd Edition

0367185083, 9780367185084

More Books

Students also viewed these Accounting questions

Question

Explain this statement: Goals are dreams with deadlines.

Answered: 1 week ago