Direct Method and Sequential Method of DistributingService DepartmentCosts

A manufacturing company has two service and twoproduction departments. Building Maintenance and Factory Office are the service departments. The production departments are Assembly and Machining.

The following data have been estimated for next year's operations:

Direct Labor Hours: Assemby 80000, Machining 40000

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 occupied, while factory office costs are allocable to Assembly and Machining on the basis of direct labor hours.

If required, round intermediate calculations to SIX decimal places and use your rounded number in subsequent calculations. Round your final answers to the nearest dollar.

1.Distribute the service department costs, using the direct method. If an entry box is not required, leave it blank.

2.Distribute the service department costs, using thesequential distribution method, with the department servicing the greatest number of other departments distributed first. If an entry box is not required, leave it blank.