Cullumber Manufacturing produces wooden outdoor furniture. Cullumber uses the direct method to allocate service department costs to the production departments. There are two service departments: administration and custodial services, and two production departments: cutting and assembly. Administration costs are allocated based on labour hours, and custodial services costs are allocated based on space occupied.

						Production Departments
		Administration		Custodial Services			Cutting		Assembly
Direct costs		$150,200		$90,300			$330,000		$728,400
Labour hours		11,100		9,300			32,000		48,000
Space occupied (m2)		5,500		5,500			20,000		30,000
# units produced							54,200		92,300

Using the direct method allocate the administration costs to the production departments.

	Production Departments
		Cutting		Assembly
Allocation of administration cost		$		$

Using the direct method allocate the custodial services costs to the production departments

	Production Departments
		Cutting		Assembly
Allocation of custodial services costs		$		$

Calculate the total costs (direct plus allocated) for each production department.

	Production Departments
		Cutting		Assembly
Total costs		$		$

Calculate a cost per unit produced for cutting and assembly

	Production Departments
		Cutting		Assembly
Cost per unit		$		$