Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Micro Brew Manufacturing Company has two Service Departments-Custodial Services and Maintenance-and three Production Departments-Brewing, Bottling, and Packaging. Micro Brew allocates the cost of Custodial Services

Micro Brew Manufacturing Company has two Service Departments-Custodial Services and Maintenance-and three Production Departments-Brewing, Bottling, and Packaging. Micro Brew allocates the cost of Custodial Services on the basis of square metres and Maintenance on the basis of labour hours. Budgeted operating data for the year just completed follow:

Service Departments

Operating Departments

Custodial

Maintenance

Brewing

Bottling

Packaging

Budgeted costs before allocation

$18,000

$8,000

$80,000

$50,000

$90,000

Square metres

1,000

10,000

5,000

22,000

13,000

Labour-hours

-

-

4,000

8,000

8,000

  1. Prepare a schedule, which allocates Service Department costs to the Production Departments by the direct method.
  2. Prepare a schedule, which allocates Service Department costs to the Production Departments by the step-down method, allocating Custodial Services first.

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Horngrens Accounting The Financial Chapters

Authors: Tracie L. Miller Nobles, Brenda L. Mattison, Ella Mae Matsumura

10th Edition

0133117561, 978-0133117561

More Books

Students also viewed these Accounting questions