Question

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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 Machining Maintenance Department Machining Assembly Maintenance Cafeteria Costs Cafeteria Assembly $99,000 64,400 40,000 32,000 0.2 0.5 0.3 0.8 0.1 0.1 Required: Use the step method to allocate the service costs, using the following: a. The order of allocation starts with Maintenance. b. The allocations are made in the reverse order (starting with Cafeteria) Complete this question by entering your answers in the tabs below. Required A Required B The order of allocation starts with Maintenance. (Negative amounts should be indicated by a minus sign. Do not round intermediate calculations.) To Cafeteria From Maintenance Machining Assembly Service department costs Maintenance Cafeteria 0$ Total Costs $ 0 Required A Required B

Answer 1

A.

	To
From	Maintenance	Cafeteria	Machining	Assembly
Service department costs	$40,000	$32,000
Maintenance	-40,000	8,000	20,000	12,000
Cafeteria		-40,000	20,000	20,000
Total costs	$0	$0	$40,000	$32,000

B.

	To
From	Cafeteria	Maintenance	Machining	Assembly
Service department costs	$32,000	$40,000
Cafeteria	-32,000	25,600	3,200	3,200
Maintenance		-65,600	41,000 (65600*0.5/0.8)	24,600 (65600*0.3/0.8)
Total costs	$0	$0	$44,200	$27,800