Caro Manufacturing has two production departments, Machining and Assembly, and t

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 of service costs used by the various departments for the month of August follow: Machining Assembly Department Machining Direct Costs Maintenance Cafeteria $105,000 70,000 50,000 38,000 0.4 0.1 0.2 Maintenance Cafeteria 0.4 0.2 0.7 Required Use the step method to allocate the service costs, using the following a. The order of allocation starts with Maintenance. (Negative amounts should be indicated by a minus sign. Do not round intermediate calculations.) 0 From Maintenance Cafeteria Machining Assembly Service department costs Maintenance Cafeteria Total Costs b. The allocations are made in the reverse order (starting with Cafeteria). (Negative amounts should be indicated by a minus sign. Do not round intermediate calculations.) 0 From Cafeteria Maintenance Machining Assembly Service department costs Cafeteria Maintenance Total Costs

Explanation / Answer

1. The order of Allocation start with Maintenance

2. Allocation are made in reverse order:

From Cafeteria Maintenance Machining Assembly Maintenance (50000) 10000 20000 20000 cafeteria (38000) 25333 12667 Total 10000 45333 32667

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