Question

Barstow Manufacturing Company has two service departments — product design and engineering support, and two production departments — assembly and finishing. The distribution of each service department's efforts to the other departments is shown below:

FROM	TO
	Design			Support			Assembly			Finishing
Design	0	%		20	%		10	%		70	%
Support	10	%		0	%		40	%		50	%

The direct operating costs of the departments (including both variable and fixed costs) were as follows:

Design	$	120,000
Engineering Support	$	480,000
Assembly	$	540,000
Finishing	$	790,000

The total cost accumulated in the assembly department using the reciprocal method is (calculate all ratios and percentages to 4 decimal places, for example 33.3333%, and round all dollar amounts to the nearest whole dollar):

Answer 1

	Design	Support	Assembly	Finishing
Operating cost of department	120000	480000	540000	790000
Allocated design cost to other department in proportionate of 20:10:70 respectively	-120000	24000	12000	84000
Total	0	504000	552000	874000
Allocated support cost to other department in proportionate of 10:40:50 respectively	50400	-504000	201600	252000
Total	50400	0	753600	1126000
Allocated design cost to other department in proportionate of 20:10:70 respectively	-50400	10080	5040	35280
Total	0	10080	758640	1161280
Allocated support cost to other department in proportionate of 10:40:50 respectively	1008	-10080	4032	5040
Total	1008	0	762672	1166320
Allocated design cost to other department in proportionate of 20:10:70 respectively	-1008	202	101	706
Total	0	202	762773	1167026
Allocated support cost to other department in proportionate of 10:40:50 respectively	20	-202	81	101
Total	20	0	762853	1167126
Allocated design cost to other department in proportionate of 20:10:70 respectively	-20	4	2	14
Total	0	4	762855	1167141
Allocated support cost to other department in proportionate of 10:40:50 respectively	0	-4	2	2
Department overhead after allocation	0	0	762857	1167143
Cost accumulated in the assembly department using the reciprocal method				762857