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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 0% 45% Maintenance 35% Purchasing Maintenance Fabrication 50% 45% Assembly 15% 10% 0% The direct operating costs of the departments (including both variable and fixed costs) were as follows: Purchasing Maintenance Fabrication Assembly $ 102,000 24,000 78,000 54,000 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, for example 33.3333%, and round all dollar amounts to the nearest whole dollar): Multiple Choice $172,395. $177,845. $80,155. $86,855. $92,605
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