Exercise 11-23 Cost Allocation: Direct Method (LO 11-2)

Warren Ltd. has two production departments, Building A and Building B, 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 June follow:

	Proportion of services used by
Department	Direct Costs	Maintenance	Cafeteria	Building A	Building B
Building A	$595,000
Building B	362,000
Maintenance	400,000	N/A	0.2	0.6	0.2
Cafeteria	360,000	0.7	N/A	0.1	0.2

Required:

Compute the allocation of service department costs to producing departments using the direct method. (Do not round intermediate calculations.)

	TOTAL COSTS
BUILDING A
BUILDING B