Question

PLEASE SHOW ALL WORK. I am teaching myself so I need step by step. If you use charts, please let me know what was multiplied, divided, etc. for that cell box. Thank you!

The Chapman Manufacturing Company has two service departments — manufacturing support and facilities management, and two production departments — assembly and packing/shipping. The distribution of each service department's efforts to the other departments is shown below:

FROM	TO
	Support			Facilities			Assembly			Pack/Ship
Support		0	%		45	%		25	%		30	%
Facilities		30	%		0	%		30	%		40	%

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

Manufacturing Support	$	240,000
Facilities Management		450,000
Assembly		1,200,000
Pack/Ship		225,000

Required:

(Calculate all ratios and percentages to 4 decimal places, for example 33.3333%, and round all dollar amounts to the nearest whole dollar.):

(1) Allocate the service department costs to the production departments using the direct method.

(2) Allocate the service department costs to the production departments using the step method with the support department going first.

(3) Allocate the service department costs to the production departments using the reciprocal method.

Answer 1