Printiem 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 Handwood line produces 300 thousand board feet of product while the Softwood produces 900 thousand board feet. The milling department direct costs, direct labor and over and 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 miling 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 an equipment and Sanitorial 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 cost 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 11,825 8,910 10,692 23,166 28,512 17,820 Number of employees employ 5 4 10 12 8 Department costs $176,000 $216,275 $309.940 $747,000 $433,160 $224,000 Your next step is to determine the proportional usage of each support department's cost driver by the other departments to which is costs are to be allocated. Compte the following tablet Maintenance Department Hours Worked Usage Percent Print om Your next step is to determine the proportionat usage of each support department's cost driver by the other departments to which is costs are to be stocated. Complete the following tables Maintenance Department Hours Worked Usage Percent Administration Log Yard Milting Drying Poging Total Administration of Employees Department Usage Percent Maintenance Log Yard Manung bring Pon Totals teoort partneromong the departments represents tance and A Using the below the form represents Admin 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 anwwer to the nearest dollar Ma thi V W * There are two support departments and four production departments. The total cost of each support department allocated to the other support department and the four production departments on the basis of a cost driver. What is the cost driver for the Maintenance Department for the Administrative Department? For each support department, find the units of its cost driver related to the other support department and each of the four production departments. Add these to find the total units of the cost driver consumed by the fire departments. Then calculate the percentage of the total consumed by each department Review the Redprocal Services Method in your text. Remember the total cost to be allocated from a support part is the sum of its original partmentat costs and its share of the costs allocated from the other support department. How would this be expressed in an equation Use the following table to allocate the support cost departments. Round allocated amounts to the nearest whole dollar. an amount is zero, entero Support Departments Production Departments Maintenance Administration Milling Drying Packaging Hours worked 11,825 10.692 3,910 28,512 23,166 17.820 Number of employees 5 12 16 Log Yard Department cost Maintenance Administration takeAssignment/takeAnsignment Main.do?invokerw&takeAssignmentSession.ocator &inprogress-false Print them Thousand Board Feet Weight Factor Weighted Thous. Bd. Ft. Weighted % of Board Feet Final Department Costs Cost Allocation to Product Line Log Yard: Hardwood 300 1 300 25 % x Softwood 900 1 900 75 Total Log Yard 1,200 1,200 100 Milling: 300 2 600 40 Hardwood Softwood 900 900 60 Total Milling 1,200 7 1,500 100 Il II Drying: Hardwood 300 1 300 25 X 900 17 900 75 Softwood 1.2007 100 Total Drying 1,200 Packaging: Mardwood 300 1 300 25 900 . 900 Saltwood 75 1.200 100 Total Packaging 1.2007 My W and earns revenue of $100,000 from selling its by-products, wood shavings and saw dust. Allocate the revenue to each pre Eine the final cost per product line. Thousand Percentage of By-product Portion of By- Board Feet Board Feet Revenue product Revenue 25 300 % 25,000 wood $100,000 $ 75 75,000 900 100,000 ood 100 % 100,000 el 1,200 Cost per Product Line Hardwood Softwood Yard ng ling kaging ubtotal ation of By-product revenue tal cost per product line Feedback Check My Work