Caro Manufacturing has two production departments, Machining and Assembly, and two service departments, Maintenance and Cafeteria....

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Caro Manufacturing has two production departments, Machining and Assembly, and two service departments, Maintenance and Cafeteria....

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
Department	Direct Costs		Maintenance	Cafeteria	Machining	Assembly
Machining	$	96,000
Assembly		70,400
Maintenance		43,600	—	0.2	0.5	0.3
Cafeteria		35,000	0.6	—	0.2	0.2

Compute the allocation of service department costs to producing departments using the direct method. (Do not round intermediate calculations.)

Matching =

Assembly=

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Answer 1

Answer #1

Answer is

Machining = $44750

Assembly:=$33850

Cost alloctiated in the ratio of 5:3 and 2:2

Department	Direct Costs	Machining	Assembly
Maintenance 5:3	43,600	27250	16350
Cafeteria 2:2	35,000	17500	17500
Cost Allocated$		$44750	$33850

Department	Direct Costs	Machining	Assembly
Maintenance 5:3	43600	=43600*5/8=27250	=3/8*43600=16350
Cafeteria 2:2	35000	=35000*2/4=17500	=2/4*35000=17500

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Answer 2

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