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Caro Manufacturing has two production departments, Machining and Assembly, and two service departments, Maintenance and Cafeteria. Direct costs for each department and the proportion
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: Department Proportion of Services Used by Maintenance Cafeteria Machining Assembly Machining Assembly Maintenance Direct Costs $125,000 64,000 48,000 0.3 0.4 0.3 Cafeteria 39,000 0.6 0.2 0.2 Required: Use the reciprocal method to allocate the service costs. (Matrix algebra is not required.) (Negative amounts should be indicated by a minus sign. Do not round intermediate calculations. Round your final answers to the nearest whole dollar amounts.) Cost Allocation To: Cafeteria From: Maintenance Machining Assembly Service department costs $ Maintenance 39,000 48,000 $ (48,000) Cafeteria Total $ 0 $ 39,000 $ 0 $ 0
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