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Question 2 Indigo Manufacturing produces wooden outdoor furniture. Indigo uses the direct method to allocate service department costs to the production departments. There are two
Question 2 Indigo Manufacturing produces wooden outdoor furniture. Indigo uses the direct method to allocate service department costs to the production departments. There are two service departments: administration and custodial services, and two production departments: cutting and assembly. Administration costs are allocated based on labour hours, and custodial services costs are allocated based on space occupied. Direct costs Labour hours Space occupied (m?) = units produced Administration $163,300 12,500 4,600 Custodial Services $100,000 10,900 4,600 Production Departments Cutting Assembly $313,500 $744,500 28,000 52,000 22,000 28,000 46,300 91,200 (a) x Your answer is incorrect. Try again. Using the direct method allocate the administration costs to the production departments. (Round intermediate calculations to 6 decimal places, e.g. 1.246873 and final answers to o decimal places, e.g. 125.) Production Departments Cutting Assembly Allocation of administration cost 50301 93417 LINK TO TEXT
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