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	8	10	12
Department costs	$193,600	$237,900	$340,950	$521,400	$476,450	$246,400

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 48c233050012002_3	fill in the blank 48c233050012002_4	%
Log Yard	fill in the blank 48c233050012002_5	fill in the blank 48c233050012002_6
Milling	fill in the blank 48c233050012002_7	fill in the blank 48c233050012002_8
Drying	fill in the blank 48c233050012002_9	fill in the blank 48c233050012002_10
Packaging	fill in the blank 48c233050012002_11	fill in the blank 48c233050012002_12
Totals	fill in the blank 48c233050012002_13	fill in the blank 48c233050012002_14	%

Administration
Department	# of Employees	Usage Percent
Maintenance	fill in the blank 48c233050012002_17	fill in the blank 48c233050012002_18	%
Log Yard	fill in the blank 48c233050012002_19	fill in the blank 48c233050012002_20
Milling	fill in the blank 48c233050012002_21	fill in the blank 48c233050012002_22
Drying	fill in the blank 48c233050012002_23	fill in the blank 48c233050012002_24
Packaging	fill in the blank 48c233050012002_25	fill in the blank 48c233050012002_26
Totals	fill in the blank 48c233050012002_27	fill in the blank 48c233050012002_28	%

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 48c233050012002_29 + (fill in the blank 48c233050012002_30% A )

A = $fill in the blank 48c233050012002_32 + (fill in the blank 48c233050012002_33% 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 48c233050012002_35

A = $fill in the blank 48c233050012002_36

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 "0".

	Support Departments			Production Departments
	Maintenance	Administration		Log Yard	Milling	Drying	Packaging
Hours worked	fill in the blank 8928c002bfb0004_1	fill in the blank 8928c002bfb0004_2		fill in the blank 8928c002bfb0004_3	fill in the blank 8928c002bfb0004_4	fill in the blank 8928c002bfb0004_5	fill in the blank 8928c002bfb0004_6
Number of employees	fill in the blank 8928c002bfb0004_7	fill in the blank 8928c002bfb0004_8		fill in the blank 8928c002bfb0004_9	fill in the blank 8928c002bfb0004_10	fill in the blank 8928c002bfb0004_11	fill in the blank 8928c002bfb0004_12
Department cost	$fill in the blank 8928c002bfb0004_13	$fill in the blank 8928c002bfb0004_14		$fill in the blank 8928c002bfb0004_15	$fill in the blank 8928c002bfb0004_16	$fill in the blank 8928c002bfb0004_17	$fill in the blank 8928c002bfb0004_18
Maintenance	fill in the blank 8928c002bfb0004_19	fill in the blank 8928c002bfb0004_20		fill in the blank 8928c002bfb0004_21	fill in the blank 8928c002bfb0004_22	fill in the blank 8928c002bfb0004_23	fill in the blank 8928c002bfb0004_24
Administration	fill in the blank 8928c002bfb0004_25	fill in the blank 8928c002bfb0004_26		fill in the blank 8928c002bfb0004_27	fill in the blank 8928c002bfb0004_28	fill in the blank 8928c002bfb0004_29	fill in the blank 8928c002bfb0004_30
Final department costs	$fill in the blank 8928c002bfb0004_31	$fill in the blank 8928c002bfb0004_32		$fill in the blank 8928c002bfb0004_33	$fill in the blank 8928c002bfb0004_34	$fill in the blank 8928c002bfb0004_35	$fill in the blank 8928c002bfb0004_36

Feedback

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 050aeaf5d06afb8_1	fill in the blank 050aeaf5d06afb8_2	fill in the blank 050aeaf5d06afb8_3	fill in the blank 050aeaf5d06afb8_4	%		$fill in the blank 050aeaf5d06afb8_5	$fill in the blank 050aeaf5d06afb8_6
Softwood	fill in the blank 050aeaf5d06afb8_7	fill in the blank 050aeaf5d06afb8_8	fill in the blank 050aeaf5d06afb8_9	fill in the blank 050aeaf5d06afb8_10			fill in the blank 050aeaf5d06afb8_11	fill in the blank 050aeaf5d06afb8_12
Total Log Yard	fill in the blank 050aeaf5d06afb8_13	fill in the blank 050aeaf5d06afb8_14	fill in the blank 050aeaf5d06afb8_15	fill in the blank 050aeaf5d06afb8_16	%			$fill in the blank 050aeaf5d06afb8_17
Milling:
Hardwood	fill in the blank 050aeaf5d06afb8_18	fill in the blank 050aeaf5d06afb8_19	fill in the blank 050aeaf5d06afb8_20	fill in the blank 050aeaf5d06afb8_21	%		$fill in the blank 050aeaf5d06afb8_22	$fill in the blank 050aeaf5d06afb8_23
Softwood	fill in the blank 050aeaf5d06afb8_24	fill in the blank 050aeaf5d06afb8_25	fill in the blank 050aeaf5d06afb8_26	fill in the blank 050aeaf5d06afb8_27			fill in the blank 050aeaf5d06afb8_28	fill in the blank 050aeaf5d06afb8_29
Total Milling	fill in the blank 050aeaf5d06afb8_30	fill in the blank 050aeaf5d06afb8_31	fill in the blank 050aeaf5d06afb8_32	fill in the blank 050aeaf5d06afb8_33	%			$fill in the blank 050aeaf5d06afb8_34
Drying:
Hardwood	fill in the blank 050aeaf5d06afb8_35	fill in the blank 050aeaf5d06afb8_36	fill in the blank 050aeaf5d06afb8_37	fill in the blank 050aeaf5d06afb8_38	%		$fill in the blank 050aeaf5d06afb8_39	$fill in the blank 050aeaf5d06afb8_40
Softwood	fill in the blank 050aeaf5d06afb8_41	fill in the blank 050aeaf5d06afb8_42	fill in the blank 050aeaf5d06afb8_43	fill in the blank 050aeaf5d06afb8_44			fill in the blank 050aeaf5d06afb8_45	fill in the blank 050aeaf5d06afb8_46
Total Drying	fill in the blank 050aeaf5d06afb8_47	fill in the blank 050aeaf5d06afb8_48	fill in the blank 050aeaf5d06afb8_49	fill in the blank 050aeaf5d06afb8_50	%			$fill in the blank 050aeaf5d06afb8_51
Packaging:
Hardwood	fill in the blank 050aeaf5d06afb8_52	fill in the blank 050aeaf5d06afb8_53	fill in the blank 050aeaf5d06afb8_54	fill in the blank 050aeaf5d06afb8_55	%		$fill in the blank 050aeaf5d06afb8_56	$fill in the blank 050aeaf5d06afb8_57
Softwood	fill in the blank 050aeaf5d06afb8_58	fill in the blank 050aeaf5d06afb8_59	fill in the blank 050aeaf5d06afb8_60	fill in the blank 050aeaf5d06afb8_61			fill in the blank 050aeaf5d06afb8_62	fill in the blank 050aeaf5d06afb8_63
Total Packaging	fill in the blank 050aeaf5d06afb8_64	fill in the blank 050aeaf5d06afb8_65	fill in the blank 050aeaf5d06afb8_66	fill in the blank 050aeaf5d06afb8_67	%			$fill in the blank 050aeaf5d06afb8_68