Question
The Jason Manufacturing Company has two production departments (millwright and assembly) and three service departments (general factory administration, factory maintenance, and factory development). A summary
The Jason Manufacturing Company has two production departments (millwright and assembly) and three service departments (general factory administration, factory maintenance, and factory development). A summary of costs and other data for each department, prior to allocation of service department costs for the year ended March 30, appears below.
The costs of the general factory administration department, factory maintenance department, and factory development are allocated on the basis of direct labor hours, square footage occupied, and number of employees, respectively.
|
Millwright |
Assembly | General Factory Admin. |
Factory Maint. |
Factory Devel. |
Direct labor costs: | $1,950,000 | $2,050,000 |
|
|
|
Direct material costs: | $3,130,000 | $ 950,000 |
|
|
|
Factory overhead costs: | $1,975,000 | $2,510,000 | $95,000 | $87,000 | $65,000 |
Direct labor hours: | 235,980 | 376,180 |
|
|
|
Number of employees: | 210 | 255 | 51 | 84 | 30 |
Sq. footage occupied: | 10,000 | 40,000 | 2,500 | 2,300 | 5,200 |
Assuming that Jason elects to use the sequential method to distribute service department costs (starting with factory development), what would be the amount of factory development that would be allocated to the factory maintenance department?
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started