Question 1:

Caro Manufacturing has two production departments, Machining and Assembly, and two service departments, Maintenance and Cafeteria. Direct costs for each department and the proportion of service costs used by the various departments for the month of August follow: Department Machining Assembly Maintenance Cafeteria Proportion of Services Used by Direct Costs Maintenance Cafeteria Machining Assembly $140,000 64,000 54,000 0.1 0.7 0.2 41,000 0.6 - 0.2 0.2 Required: Use the reciprocal method to allocate the service costs. (Matrix algebra is not required.) (Negative amounts should be indicated by a minus sign. Do not round intermediate calculations.) From: Service department costs Maintenance Cafeteria Total Cost Allocation To: Maintenance Cafeteria Machining Assembly