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

Required:

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

	Total Costs
Machining
Assembly

business accounting

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Answer 1

Answer #1

Cost allocation	machining	assembly
direct cost	96,000	70,400
maintenance (0.5/0.8 , 0.3/0.8)	27,250	16,350
Cafeteria (0.2/0.4 , 0.2/0.4)	17,500	17,500
Total cost	140,750	104,250

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Answer 2

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