ForestLand Wood Products manufactures lumber and wood components. The company has two main product lines: Hardwood and Softwood. Hardwoods are used for flooring, cabinetry, paneling, doors and trimwork. Softwoods are used for wall studs, joists, planks, rafters, beams, stringers, posts, decking, subflooring and concrete forms. ForestLand also sells a by-product, wood shavings and saw dust. Shavings are purchased for farm and industrial use as well as for further processing into wood pellets and fiber board. The revenue is allocated to each product line based on the percentage of thousand board feet produced by the product line.

Your accounting firm has been retained by ForestLand for three years. You have been assigned to properly allocate support department costs. Your manager wants the allocation to be as accurate as possible and has instructed you to use the reciprocal services method. She reminds you that revenue from by-products are used to offset costs.

You begin your research and learn that there are four production departments: log yard, milling, drying, and packaging. The Hardwood line produces 300 thousand board feet of product while the Softwood produces 900 thousand board feet. The milling department direct costs, direct labor and overhead per thousand board feet for Hardwood is two times that of Softwood. You have been instructed to use the weighted average method to allocate the costs in the milling department between the two product lines. The remaining department costs are the same for both product lines, per thousand board feet.

There are two support departments: maintenance and administration. The maintenance department is responsible for maintaining all equipment and janitorial duties. Because the equipment is used more extensively for hardwoods, the department cost driver is hours worked. The administration department includes the company president and his staff. Their duties include accounting, human resources, and information technology. The cost driver for the administration department is number of employees.

In your first step, you determine the costs traced to each department and the usage of the support department cost drivers. You have created the following table:

Maintenance Administration Log Yard Milling Drying Packaging Hours worked 10,750 8,100 9,720 21,060 25,920 16,200 Number of employees 6 4 4 10 12 8 Department costs $205,600 $248,600 $369,200 $835,100 $508,700 $290,100 Your next step is to determine the proportional usage of each support department's cost driver by the other departments to which its costs are to be allocated. Complete the following tables.

Maintenance Department Hours Worked Usage Percent

Administration fill in the blank cbaec0fe9ff4009_3 8,100 fill in the blank cbaec0fe9ff4009_4 10 % Log Yard fill in the blank cbaec0fe9ff4009_5 9,720 fill in the blank cbaec0fe9ff4009_6 12 Milling fill in the blank cbaec0fe9ff4009_7 21,060 fill in the blank cbaec0fe9ff4009_8 26 Drying fill in the blank cbaec0fe9ff4009_9 25,920 fill in the blank cbaec0fe9ff4009_10 32 Packaging fill in the blank cbaec0fe9ff4009_11 16,200 fill in the blank cbaec0fe9ff4009_12 20 Totals fill in the blank cbaec0fe9ff4009_13 81,000 fill in the blank cbaec0fe9ff4009_14 100 %

Administration Department # of Employees Usage Percent

Maintenance fill in the blank cbaec0fe9ff4009_17 6 fill in the blank cbaec0fe9ff4009_18 15 % Log Yard fill in the blank cbaec0fe9ff4009_19 4 fill in the blank cbaec0fe9ff4009_20 10 Milling fill in the blank cbaec0fe9ff4009_21 10 fill in the blank cbaec0fe9ff4009_22 25 Drying fill in the blank cbaec0fe9ff4009_23 12 fill in the blank cbaec0fe9ff4009_24 30 Packaging fill in the blank cbaec0fe9ff4009_25 8 fill in the blank cbaec0fe9ff4009_26 20 Totals fill in the blank cbaec0fe9ff4009_27 40 fill in the blank cbaec0fe9ff4009_28 100 % Using the cells below, create the formulas that will simultaneously allocate support department costs among the departments. "M" represents Maintenance and "A" represents Administration.

M = $fill in the blank cbaec0fe9ff4009_29 205,600 + (fill in the blank cbaec0fe9ff4009_30 15 % A )

A = $fill in the blank cbaec0fe9ff4009_32 248,600 + (fill in the blank cbaec0fe9ff4009_33 10 % M )

Solve the equations, If required round any decimal to three places in your computations. For example, .0183 would be rounded to .018. Round your final answer to the nearest dollar.

M = $fill in the blank cbaec0fe9ff4009_35 A = $fill in the blank cbaec0fe9ff4009_36 Feedback Area Feedback Question Content Area Use the following table to allocate the support cost departments. Round allocated amounts to the nearest whole dollar. If an amount is zero, enter "0".

Support Departments Production Departments Maintenance Administration Log Yard Milling Drying Packaging Hours worked fill in the blank 51cac1ffcf8d05e_1 fill in the blank 51cac1ffcf8d05e_2 fill in the blank 51cac1ffcf8d05e_3 fill in the blank 51cac1ffcf8d05e_4 fill in the blank 51cac1ffcf8d05e_5 fill in the blank 51cac1ffcf8d05e_6 Number of employees fill in the blank 51cac1ffcf8d05e_7 fill in the blank 51cac1ffcf8d05e_8 fill in the blank 51cac1ffcf8d05e_9 fill in the blank 51cac1ffcf8d05e_10 fill in the blank 51cac1ffcf8d05e_11 fill in the blank 51cac1ffcf8d05e_12 Department cost $fill in the blank 51cac1ffcf8d05e_13 $fill in the blank 51cac1ffcf8d05e_14 $fill in the blank 51cac1ffcf8d05e_15 $fill in the blank 51cac1ffcf8d05e_16 $fill in the blank 51cac1ffcf8d05e_17 $fill in the blank 51cac1ffcf8d05e_18 Maintenance fill in the blank 51cac1ffcf8d05e_19 fill in the blank 51cac1ffcf8d05e_20 fill in the blank 51cac1ffcf8d05e_21 fill in the blank 51cac1ffcf8d05e_22 fill in the blank 51cac1ffcf8d05e_23 fill in the blank 51cac1ffcf8d05e_24 Administration fill in the blank 51cac1ffcf8d05e_25 fill in the blank 51cac1ffcf8d05e_26 fill in the blank 51cac1ffcf8d05e_27 fill in the blank 51cac1ffcf8d05e_28 fill in the blank 51cac1ffcf8d05e_29 fill in the blank 51cac1ffcf8d05e_30 Final department costs $fill in the blank 51cac1ffcf8d05e_31 $fill in the blank 51cac1ffcf8d05e_32 $fill in the blank 51cac1ffcf8d05e_33 $fill in the blank 51cac1ffcf8d05e_34 $fill in the blank 51cac1ffcf8d05e_35 $fill in the blank 51cac1ffcf8d05e_36 Feedback Area Feedback Question Content Area Using the rounded amounts from the support cost allocation table (previous task), complete the following table to allocate the production department costs to each product line. Round allocated amounts to the nearest whole dollar.

Thousand Board Feet Weight Factor Weighted Thous. Bd. Ft. Weighted % of Board Feet Final Department Costs Cost Allocation to Product Line Log Yard: Hardwood fill in the blank 86ccdcfcd055f97_1 fill in the blank 86ccdcfcd055f97_2 fill in the blank 86ccdcfcd055f97_3 fill in the blank 86ccdcfcd055f97_4 % $fill in the blank 86ccdcfcd055f97_5 $fill in the blank 86ccdcfcd055f97_6 Softwood fill in the blank 86ccdcfcd055f97_7 fill in the blank 86ccdcfcd055f97_8 fill in the blank 86ccdcfcd055f97_9 fill in the blank 86ccdcfcd055f97_10 fill in the blank 86ccdcfcd055f97_11 fill in the blank 86ccdcfcd055f97_12 Total Log Yard fill in the blank 86ccdcfcd055f97_13 fill in the blank 86ccdcfcd055f97_14 fill in the blank 86ccdcfcd055f97_15 fill in the blank 86ccdcfcd055f97_16 % $fill in the blank 86ccdcfcd055f97_17 Milling: Hardwood fill in the blank 86ccdcfcd055f97_18 fill in the blank 86ccdcfcd055f97_19 fill in the blank 86ccdcfcd055f97_20 fill in the blank 86ccdcfcd055f97_21 % $fill in the blank 86ccdcfcd055f97_22 $fill in the blank 86ccdcfcd055f97_23 Softwood fill in the blank 86ccdcfcd055f97_24 fill in the blank 86ccdcfcd055f97_25 fill in the blank 86ccdcfcd055f97_26 fill in the blank 86ccdcfcd055f97_27 fill in the blank 86ccdcfcd055f97_28 fill in the blank 86ccdcfcd055f97_29 Total Milling fill in the blank 86ccdcfcd055f97_30 fill in the blank 86ccdcfcd055f97_31 fill in the blank 86ccdcfcd055f97_32 fill in the blank 86ccdcfcd055f97_33 % $fill in the blank 86ccdcfcd055f97_34 Drying: Hardwood fill in the blank 86ccdcfcd055f97_35 fill in the blank 86ccdcfcd055f97_36 fill in the blank 86ccdcfcd055f97_37 fill in the blank 86ccdcfcd055f97_38 % $fill in the blank 86ccdcfcd055f97_39 $fill in the blank 86ccdcfcd055f97_40 Softwood fill in the blank 86ccdcfcd055f97_41 fill in the blank 86ccdcfcd055f97_42 fill in the blank 86ccdcfcd055f97_43 fill in the blank 86ccdcfcd055f97_44 fill in the blank 86ccdcfcd055f97_45 fill in the blank 86ccdcfcd055f97_46 Total Drying fill in the blank 86ccdcfcd055f97_47 fill in the blank 86ccdcfcd055f97_48 fill in the blank 86ccdcfcd055f97_49 fill in the blank 86ccdcfcd055f97_50 % $fill in the blank 86ccdcfcd055f97_51 Packaging: Hardwood fill in the blank 86ccdcfcd055f97_52 fill in the blank 86ccdcfcd055f97_53 fill in the blank 86ccdcfcd055f97_54 fill in the blank 86ccdcfcd055f97_55 % $fill in the blank 86ccdcfcd055f97_56 $fill in the blank 86ccdcfcd055f97_57 Softwood fill in the blank 86ccdcfcd055f97_58 fill in the blank 86ccdcfcd055f97_59 fill in the blank 86ccdcfcd055f97_60 fill in the blank 86ccdcfcd055f97_61 fill in the blank 86ccdcfcd055f97_62 fill in the blank 86ccdcfcd055f97_63 Total Packaging fill in the blank 86ccdcfcd055f97_64 fill in the blank 86ccdcfcd055f97_65 fill in the blank 86ccdcfcd055f97_66 fill in the blank 86ccdcfcd055f97_67 % $fill in the blank 86ccdcfcd055f97_68 Feedback Area Feedback Question Content Area Forest Land earns revenue of $100,000 from selling its by-products, wood shavings and saw dust. Allocate the revenue to each product line in the following table and determine the final cost per product line.

Thousand Board Feet Percentage of Board Feet By-product Revenue Portion of By- product Revenue Hardwood fill in the blank 8b93c2f80043fae_1 fill in the blank 8b93c2f80043fae_2 % $100,000 $fill in the blank 8b93c2f80043fae_3 Softwood fill in the blank 8b93c2f80043fae_4 fill in the blank 8b93c2f80043fae_5 100,000 fill in the blank 8b93c2f80043fae_6 Total fill in the blank 8b93c2f80043fae_7 fill in the blank 8b93c2f80043fae_8 % $fill in the blank 8b93c2f80043fae_9

Cost per Product Line Hardwood Softwood Log Yard $fill in the blank 8b93c2f80043fae_10 $fill in the blank 8b93c2f80043fae_11 Milling fill in the blank 8b93c2f80043fae_12 fill in the blank 8b93c2f80043fae_13 Drying fill in the blank 8b93c2f80043fae_14 fill in the blank 8b93c2f80043fae_15 Packaging fill in the blank 8b93c2f80043fae_16 fill in the blank 8b93c2f80043fae_17 Subtotal $fill in the blank 8b93c2f80043fae_18 $fill in the blank 8b93c2f80043fae_19 Portion of By-product revenue fill in the blank 8b93c2f80043fae_20 fill in the blank 8b93c2f80043fae_21 Total cost per product line $fill in the blank 8b93c2f80043fae_22 $fill in the blank 8b93c2f80043fae_23