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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,

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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, poste, decking, subflooring and concrete forms. Forest and also sells aby product. Wood Shavings and saw dust Shavings are purchased for form 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 year. 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 offent costs You begin your research and learn that there are four production departmental yard, milling, drying, and packaging The Hardwood line producer 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 fout 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 foot There are two support departments, maintenance and administration. The maintenance department is responsible for maintaining all equipment and janitorial duties Because the squipment is used more extensively for hardwoods, the department cost driver is hours worked. The administration department includes the company president and his statt. 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! 12 B Maintenance Administration Log Yard Milling Drying Packaging Hours worked 10.750 8,100 9,720 21.060 25,920 16,200 Number of employees 10 Department costs 5193,600 $237,900 $340,950 $52,400 $476,450 $246,400 Your next step is to determine the proportionat usage of each support department's cost driver by the other departments to which its costs are to be alicated. Complete the following tables Maintenance Department Usage Percent Log Yard Milling Drying Packaging Totals Administration Department Usage Percent % Log Yard Milling Drying Packaging Totals % Using the calls below. create the formules that will simultaneously locate support department costs among the departments. Meresants Maintenance and A represents administration MES Solve the equations. If required found any decimal to the places n your computations. For example, 0103 would be rounded to 016. Round your lower to the nearest diar ME A. Use the following table to allocate the support cost departments. Round allocated amounts to the nearest whole dollar. If an amount is zero, entero Support Departments Maintenance Administration Production Departments Milling Drying Log Yard Packaging Hours worked Number of employees Department cost 5 Maintenance Administration Final department costs Thousand Board Feet Weight Factor Weighted Thous. Bd. Ft Weighted of Board Feet Final Department Costs Cost Allocation to Product Line Log Yard: Hardwood $ Softwood Total Log Yard Milling: Hardwood Softwood Total Miling Drying: Hardwood Softwood Total Drying Softwood Total Drying Packaging Hardwood Softwood Total Packaging Forest and earn revenue of $100.000 from selling to by-products, wood shavinge and to cust. Abocate the revenues each product in the following table and catermine the final cost per productie Thousand Percentage of By product Portion of By Board Feet Board Feet Revenue product Revenue Hardwood $100,000 Softwood 100,000 Total Cost per Product Line Hardwood Softwood Log Yard Milling Orvice Packaging Subtotal Portion of By-product revenue Total cost per product line

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