A manufacturing company has two service departments, Custodial Services and Maintenance, and three production departments, Cutting, Milling, and Assembly. The company allocates the cost of Custodial Services on the basis of square footage and Maintenance on the basis of labor-hours. No distinction is made between variable and fixed costs. Budgeted operating data for the year just completed follow: Custodial Services Maintenance Cutting Milling Assembly Budgeted costs before $24,000 $ 12,000 $120,000 $75,000 $135,000 allocation Square feet 2,000 20,000 10,000 44,000 26,000 Labor hours 4,000 8,000 8,000 a. Calculate the custodial services cost that would be allocated to Miling Department by the direct method. Allocated to Miling under the direct method=$ (All answers are whole numbers -- unless specified otherwise. You should NOT include the $ sign or a comma. Eg you should type 1000 for one thousand. Negative numbers should be added with a minus sign, e.g.-1000 for a decrease or loss of one thousand.) b. Calculate the total cost of Milling Department if the company uses the step down method rather than the direct method. Assume that the company allocates Custodial Services cost first. Total cost of Milling under the step down methods Which of the following statements is true: a. One of the weaknesses of budgets is that they are of little value in uncovering potential bottlenecks. b. In a production budget. If the number of units in finished goods Inventory at the end of the period is less than the number of units in finished goods inventory at the beginning of the period, then the expected number of units sold is less than the number of units to be produced during the period. c. A benefit from budgeting is that it forces managers to think about and plan for the future. d. The selling and administrative expense budget lists all costs of production other than direct materials and direct labor, e. The disbursements section of a cash budget consists of all cash payments for the period except cash payments for dividends. Statement a Statemente Statement Statement de Statement