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Tasty Bake is a medium sized family owned business producing various types of cakes and biscuits for the GCC markets. The factory's operations are divided
Tasty Bake is a medium sized family owned business producing various types of cakes and biscuits for the GCC markets. The factory's operations are divided into six divisions. Four are production divisions: Preparation, Mixing, Baking and Packaging, and the other two are service divisions: Maintenance and Canteen. Maintenance department received 25% service from Canteen while the latter received 15% service from maintenance: Maintenance Canteen 15% Percentage of services provided by Maintenance Percentage of services provided by Canteen 25% The following information is related to the budgeted costs for each of those departments for the month of January: Departments Preparation Mixing Baking Packaging Departmental costs (SR) Machine hours No. of employees 123,456 134 5 876,543 372 10 567,000 660 8 123,450 257 12 340 Maintenance Canteen 28,000 45,000 2 10 240 Required: a) Allocate the costs from the support departments (maintenance based on machine hours and canteen based on number of employees) to the four production departments using: i. direct method ii. step down method iii. reciprocal method
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