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, miling, 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 tablet Maintenance Administration Log Yard Milling Drying Packaging Hours worked 11,000 9,720 25,920 16,200 21,060 Number of employees 12 16 Department costs $212,960 $261,690 $375,045 $767,400 $524,095 $271,040 Your next steps 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 8.100 6 Department Hours Worked Usage Percent Administration 9,720 12 V Log Yard 8,100 10 Milling 25,920 32 Drying 16,200 20 Packaging 21,060 26 Totals B1,000 V 100 Administration of Employees Department Maintenance Usage Percent 16 Log Yard 6 12 Milling 12 24 Drying 16 327 Packaging 16 Totals 50 100 Using the cells below, create the formulas that will simultaneously allocate support department costs among the departments. "M" represents Maintenance and represents Administration M 212,960 - 16 AV 261,690 127 Using the cells below, create the formulas that will simultaneously allocate support department costs among the departments. "M" represents Maintenance and "A" represents Administration, MES 212,960 + A- 261,690 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- 259,819 X AS Feedback Use the following table to allocate the support cost departments. Round allocated amounts to the nearest whole dollar. If an amount is zero, enter "o". Support Departments Production Departments Maintenance Administration Log Yard Milling Drying Packaging Hours worked 11,000 9,720 8,100 25,920 16,200 21,0507 Number of employees 5 6 12 16 Department cost 261,690 212,960 375,045 767,400 524,095 5 271,040 Maintenance 256,836.56 X 30,820 X 25,684 X 83,156 x 51,972 X 67,564 X Administration 43,917 X -292,780 X 29,758 X 70,354 X 93,806 X 46,903 X Final department costs 436,208 X 920,910 X 669,873 X 305,507 X Using the rounded amounts from the support cost allocation table previous task), complete the following table to locate the production department casts to each product line. Round socated amounts to the Dearest who dollar Thousand Weight Weighted Weighted of Final Department Cost Allocation Board Feet Factor Thous. Bd. Ft. Board Feet Costs to Product Line Log Yard: Hardwood 300 1 300 25 430,032 X 109,052 X Softwood 900 900 75 436,200 x 327,156 x Total Log Yard 1,200 2 1.2007 100 436,200 x Milling: Harwood 300 V 27 600 40 Sofood 900 1 900 50 Total Miling 1,200 1,500 100 Drying Hardwood 300 300 25 Softwood 900 1 900 25 Tural brine 1,200 2 1,200 100 Packaging Harwood 300 1 300 25 Softwood 900 I 900 75 Total Packaging 1,200 1,200 100 II II 12 Forest Land earns revenue of $100,000 from seling its by-products, wood shavings and saw dust. Allocate the revenue to each product line in the following table and determine the final cost Thousand Percentage of By-product Portion of By Board Feet Board Feet Revenue product Revenue Mardwood 300 25 $100,000 $ 25,000 Softwood 900 75 100,000 75,000 Total 1.2007 100 100,000 Log Yard Milling Cost per Product Line Hardwood Softwood 107,508 X 322,524 368,364 X 552,546 167,468 x 524,095 X 96,376 X 289,130 X 741,260 X 1,671,236 x Drying Packaging Subtotal Portion of Hygrobuct revenue 25,000 75,000 Total cost per aroduct line 714,019 X 1,596,236