Question
Warren Ltd. has two production departments, Building A and Building B, and two service departments, Maintenance and Cafeteria. Direct costs for each department and the
Warren Ltd. has two production departments, Building A and Building B, 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 June follow:
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Assume that both Building A and Building B work on just two jobs during the month of June: RW-12 and RW-13. Costs are allocated to jobs based on labor-hours in Building A and machine-hours in Building B. The number of labor- and machine-hours worked in each department are as follows:
Building A | Building B | ||
Job RW-12 | Labor Hours | 180 | 10 |
Machine Hours | 30 | 40 | |
Job RW-13 | Labor Hours | 20 | 20 |
Machine Hours | 20 | 190 |
Required: | |||||||||
How much of the service department costs allocated to Building A and Building B in the direct method should be allocated to Job RW-12? How much should be allocated to Job RW-13? (Note: Due to rounding, the cost allocations to the various jobs may not add up to the total service department costs being allocated.) (Do not round intermediate calculations and round your final answers to the nearest dollar amount.)
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