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	11,000	8,100	9,720	21,060	16,200	25,920
Number of employees	6	4	4	10	12	8
Department costs	$212,960	$261,690	$375,045	$767,400	$524,095	$271,040

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.

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 = $

A = $

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 16b77cf33fc3ff4_1	fill in the blank 16b77cf33fc3ff4_2	fill in the blank 16b77cf33fc3ff4_3	fill in the blank 16b77cf33fc3ff4_4	%		$fill in the blank 16b77cf33fc3ff4_5	$fill in the blank 16b77cf33fc3ff4_6
Softwood	fill in the blank 16b77cf33fc3ff4_7	fill in the blank 16b77cf33fc3ff4_8	fill in the blank 16b77cf33fc3ff4_9	fill in the blank 16b77cf33fc3ff4_10			fill in the blank 16b77cf33fc3ff4_11	fill in the blank 16b77cf33fc3ff4_12
Total Log Yard	fill in the blank 16b77cf33fc3ff4_13	fill in the blank 16b77cf33fc3ff4_14	fill in the blank 16b77cf33fc3ff4_15	fill in the blank 16b77cf33fc3ff4_16	%			$fill in the blank 16b77cf33fc3ff4_17
Milling:
Hardwood	fill in the blank 16b77cf33fc3ff4_18	fill in the blank 16b77cf33fc3ff4_19	fill in the blank 16b77cf33fc3ff4_20	fill in the blank 16b77cf33fc3ff4_21	%		$fill in the blank 16b77cf33fc3ff4_22	$fill in the blank 16b77cf33fc3ff4_23
Softwood	fill in the blank 16b77cf33fc3ff4_24	fill in the blank 16b77cf33fc3ff4_25	fill in the blank 16b77cf33fc3ff4_26	fill in the blank 16b77cf33fc3ff4_27			fill in the blank 16b77cf33fc3ff4_28	fill in the blank 16b77cf33fc3ff4_29
Total Milling	fill in the blank 16b77cf33fc3ff4_30	fill in the blank 16b77cf33fc3ff4_31	fill in the blank 16b77cf33fc3ff4_32	fill in the blank 16b77cf33fc3ff4_33	%			$fill in the blank 16b77cf33fc3ff4_34
Drying:
Hardwood	fill in the blank 16b77cf33fc3ff4_35	fill in the blank 16b77cf33fc3ff4_36	fill in the blank 16b77cf33fc3ff4_37	fill in the blank 16b77cf33fc3ff4_38	%		$fill in the blank 16b77cf33fc3ff4_39	$fill in the blank 16b77cf33fc3ff4_40
Softwood	fill in the blank 16b77cf33fc3ff4_41	fill in the blank 16b77cf33fc3ff4_42	fill in the blank 16b77cf33fc3ff4_43	fill in the blank 16b77cf33fc3ff4_44			fill in the blank 16b77cf33fc3ff4_45	fill in the blank 16b77cf33fc3ff4_46
Total Drying	fill in the blank 16b77cf33fc3ff4_47	fill in the blank 16b77cf33fc3ff4_48	fill in the blank 16b77cf33fc3ff4_49	fill in the blank 16b77cf33fc3ff4_50	%			$fill in the blank 16b77cf33fc3ff4_51
Packaging:
Hardwood	fill in the blank 16b77cf33fc3ff4_52	fill in the blank 16b77cf33fc3ff4_53	fill in the blank 16b77cf33fc3ff4_54	fill in the blank 16b77cf33fc3ff4_55	%		$fill in the blank 16b77cf33fc3ff4_56	$fill in the blank 16b77cf33fc3ff4_57
Softwood	fill in the blank 16b77cf33fc3ff4_58	fill in the blank 16b77cf33fc3ff4_59	fill in the blank 16b77cf33fc3ff4_60	fill in the blank 16b77cf33fc3ff4_61			fill in the blank 16b77cf33fc3ff4_62	fill in the blank 16b77cf33fc3ff4_63
Total Packaging	fill in the blank 16b77cf33fc3ff4_64	fill in the blank 16b77cf33fc3ff4_65	fill in the blank 16b77cf33fc3ff4_66	fill in the blank 16b77cf33fc3ff4_67	%			$fill in the blank 16b77cf33fc3ff4_68