Question
Seahawks Company has two service departments, Maintenance and Cafeteria, as well as two production departments, Mixing and Bottling. Maintenance Department costs are allocated based on
Seahawks Company has two service departments, Maintenance and Cafeteria, as well as two production departments, Mixing and Bottling. Maintenance Department costs are allocated based on square footage and Cafeteria Department costs are allocated based on number of employees. The following data was available: Maintenance Cafeteria Mixing Bottling Direct costs $210,000 $180,000 $76,000 $85,000 Square footage 1,000 2,000 4,000 6,000 Number of employees 30 20 60 100 Direct labor hours 8,000 6,000 Assume the direct method is used to allocate service department costs to producing departments. Required: A) Determine the total costs of the Mixing Department after allocating the service departments' costs. B) Determine the total costs of the Bottling Department after allocating the service departments' costs.
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