critical thinking problem E4-8

distribute cost for questions 1 & 2 to spreadsheet

Labor hours are 80,000 Materials & 40,000 Assembly

floor space

10% Factory Office

40% Assemly

50% Machining

of Arial -10 A BI UBA.A. Paste Alignment Clipboard Font 020 X A B co Building Factory Maintenance Office Assembly Machining S 90,000S 171,000 S 378,000S 328,000 S Direct charges Total 967,000 Allocate building maintenance based on floor space: Assembly Machining 36,000 45,000 Allocate factory office based on direct labor hours: Assembly Machining Building Factory D G H BC Assembly Machining Building Maintenance Factory Office Assembly Machining Total Direct charges Allocate building maintenance based on floor space: Factory office Assembly Machining Allocate factory office based on direct labor hours: Assembly Machining Chapter 4-Accounting for Fa The following data have been estimated for next year's operations: Direct labor hours: Assembly, 80,000; Machining, 40,000 Floor space occupied: Factory Office, 10%; Assembly, 40%; Machining, 50% The direct charges identified with each of the departments are as follows: Building maintenance. $ 90,000 Factory office........ 171,000 Assembly.......... 378,000 Machining ........ ............ 328,000 The building maintenance department services all departments of the company, and its costs are allocated using floor space occu- pied, while factory office costs are allocable to Assembly and Machining on the basis of direct labor hours. 1. Distribute the service department costs, using the direct method. 2. Distribute the service department costs, using the sequential distribution method, with the department servicing the greatest number of other departments distributed first. Direct method and sequential method of distributing service department costs A manufacturing company has two service and two production departments. Human Resources and Machine Repair are the ser vice departments. The production departments are Grinding and Polishing. The following data have been estimated for next year's operations: Machine hours: Grinding, 75,000; Polishing, 25000 Number of emplo