In: Accounting
Solexx Corporation allocates its service department overhead costs to producing departments. This information is for the month of June:
Service Departments | |||||||
Maintenance | Utilities | ||||||
Overhead costs incurred | $ | 486,000 | $ | 657,000 | |||
Service provided to departments | |||||||
Maintenance | — | 5 | % | ||||
Utilities | 10 | % | — | ||||
Producing—A | 20 | 40 | |||||
Producing—B | 70 | 55 | |||||
Totals | 100 | % | 100 | % | |||
Required:
What is the amount of maintenance and utilities department costs distributed to producing departments A and B for June using (1) the direct method, (2) the step method (maintenance department first), and (3) the reciprocal method? (Round percentage calculations to 4 decimal places (e.g., 33.3333%), do not round intermediate calculations and round your final answers to the nearest dollar amount.)
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