Exercise 11-29 Cost Allocation: Step Method (LO 11-3)

(PLEASE INCLUDE STEP BY STEP CALCULATIONS, not sure where I went wrong)

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	$	100,000
Assembly		65,000
Maintenance		50,000				0.3		0.4		0.3
Cafeteria		35,000		0.7				0.2		0.1

Required:

Use the step method to allocate the service costs, using the following:

a. The order of allocation starts with Maintenance. (Negative amounts should be indicated by a minus sign. Do not round intermediate calculations.)

b. The allocations are made in the reverse order (starting with Cafeteria). (Negative amounts should be indicated by a minus sign. Do not round intermediate calculations.)

Award: 0.44 out of 0.66 points Exercise 11-29 Cost Allocation: Step Method (LO 11-3) 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 rtion of Services Used Direct Costs MaintenanceCafeteria Machining Assembly Machining S100,000 65,000 50,000 35,000 0.4 0.2 0.3 Maintenance Cafeteria 0.3 0.7 Required Use the step method to allocate the service costs, using the following: a. The order of allocation starts with Maintenance. (Negative amounts should be indicated by a minus sign. Do not round intermediate calculations.) Answer is complete but not entirely correct. 0 From Maintenance Cafeteria MachiningAssembly department costs Maintenance Cafeteria Total Costs 0 15,00020,00015,000 0 33,33316,667 0 S 15,000 $53,333 31.667 b. The allocations are made in the reverse order (starting with Cafeteria). (Negative amounts should be indicated by a minus sign. Do not round intermediate calculations.) Answer is complete but not entirely correct. 0 From Cafeteria MaintenanceMachiningAssembly Service department costs Cafeteria Maintenance Total Costs 0003,500 0 42,57131,929 0 S 24,500 49,571 35,429 45007