Question
Barstow Manufacturing Company has two service departments product design and engineering support, and two production departments assembly and finishing. The distribution of each service department's
Barstow Manufacturing Company has two service departments product design and engineering support, and two production departments assembly and finishing. The distribution of each service department's efforts to the other departments is shown below:
FROM | TO | ||||||||||
Design | Support | Assembly | Finishing | ||||||||
Design | 0 | % | 10 | % | 30 | % | 60 | % | |||
Support | 20 | % | 0 | % | 45 | % | 35 | % | |||
The direct operating costs of the departments (including both variable and fixed costs) were as follows:
Design | $ | 180,000 |
Engineering Support | $ | 200,000 |
Assembly | $ | 710,000 |
Finishing | $ | 1,080,000 |
The total cost accumulated in the finishing department using the step 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; assume that the design department goes first):
-
$2,370,000.
-
$846,625.
-
$886,625.
-
$1,283,375.
-
$893,291.
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