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method is (round all dollar amounts to the nearest whole dollar). Direct Method DEPARTMENTAL ALLOCATION BASES Purchasing Maintenance percent percent Totals for All Departments before
method is (round all dollar amounts to the nearest whole dollar). Direct Method DEPARTMENTAL ALLOCATION BASES Purchasing Maintenance percent percent Totals for All Departments before Allocation Reallocate Service Department Costs to Production Depts: Service Departments Production Purchasing Maintenance Fabrication Assembly Total 6000% 1000% 3000% 10000% 2000% 3000% 5000% 10000% $20 $60 $40 $80 $200 The Direct Method Purchasing 1000% 3000% 4000% Service % to producing departments Allocation % per the direct method: Allocation amount Maintenance Service % to producing departments 3000% 5000% 8000% Allocation % per the direct method: Allocation amount Totals for Production Departments The Merchant Manufacturing Company has two service departments - purchasing and maintenance, and two production departments -fabrication and assembly. The distribution of each service department's efforts to the other departments is shown below: TO FROM Purchasing Maintenance Fabrication Assembly Purchasing Maintenance 0% 20% 60% 0% 10% 30% 30% 50% The direct operating costs of the departments (including both variable and fixed costs) were as follows: Purchasing $96,000 Maintenance $18,000 Fabrication $72,000 Assembly $48,000 Complete Table 1 below that indicates the total cost accumulated in the Fabrication and Assembly departments using the direct method is (round all dollar amounts to the nearest whole dollar)
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