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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 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 $ 104,000
Assembly 74,400
Maintenance 46,000 0.2 0.5 0.3
Cafeteria 37,000 0.6 0.2 0.2

References

Section BreakExercise 11-26 & 11-27 (LO 11-2)

1.

value: 3.00 points

Required information

Exercise 11-26 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.)

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