Question
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
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 | $ | 96,000 |
|
|
|
|
|
|
|
|
|
Assembly |
| 70,400 |
|
|
|
|
|
|
|
|
|
Maintenance |
| 43,600 |
|
| 0.2 |
| 0.5 |
| 0.3 |
| |
Cafeteria |
| 35,000 |
| 0.6 |
|
| 0.2 |
| 0.2 |
| |
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 | 320 |
| 60 |
|
| Labor-hours | 50 |
| 20 |
|
Job CM-23: | Machine-hours | 40 |
| 50 |
|
| Labor-hours | 30 |
| 220 |
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? (Round "Department rate" to 2 decimal places and final answers to the nearest whole dollar.)
| ||||||||||
|
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started