Question
The Merchant Manufacturing Company has two service departments purchasing and maintenance, and two production departments fabrication and assembly. The distribution of each service department's efforts
The Merchant Manufacturing Company has two service departments purchasing and maintenance, and two production departments fabrication and assembly. The distribution of each service department's efforts to the other departments is shown below: FROM TO Purchasing Maintenance Fabrication Assembly Purchasing 0 % 40 % 45 % 15 % Maintenance 40 % 0 % 25 % 35 % The direct operating costs of the departments (including both variable and fixed costs) were as follows: Purchasing $ 105,000 Maintenance 27,000 Fabrication 81,000 Assembly 57,000 The total cost accumulated in the fabrication department using the step method is (assume the purchasing department goes first; calculate all ratios and percentages to 4 decimal places
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