Question
Caro Manufacturing has two production departments, Machining and Assembly, and two service departments, Maintenance and Cafeteria. Direct costs for each department and the proportion
Caro Manufacturing has two production departments, Machining and Assembly, and two service departments, Maintenance and Cafeteria. Direct costs for each department and the proportion of service costs used by the various departments for the month of August follow: Proportion of Services Used by Direct Maintenance Cafeteria Machining Assembly Department Machining Assembly Maintenance Costs $110, 000 67,000 51,000 38,000 0.2 0.5 0.3 Cafeteria 0.7 0.1 0.2 Required: Use the reciprocal method to allocate the service costs. (Matrix algebra is not required.) Cost Allocation To: From: Maintenance Cafeteria Machining Assembly Service department costs Maintenance Cafeteria Total $ $
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Fundamentals of Cost Accounting
Authors: William Lanen, Shannon Anderson, Michael Maher
5th edition
978-1259728877, 1259728870, 978-1259565403
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