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aro Manufacturing has two production departments, Machining and Assembly, and two service departments, Maintenance and Cafeteria....

aro 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 $ 103,000
Assembly 72,400
Maintenance 44,800 — 0.2 0.6 0.2
Cafeteria 36,000 0.6 — 0.2 0.2

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

Total Costs

Machining

Assembly

Assume that both Machining and Assembly work on just two jobs during the month of August: CM-22 and CM-23. Costs are allocated to jobs based on machine-hours in Machining and labor-hours in Assembly. The number of labor- and machine-hours worked in each department are as follows:

Machining Assembly
Job CM-22: Machine-hours 290 40
Labor-hours 20 30
Job CM-23: Machine-hours 30 50
Labor-hours 40 370

How much of the service department costs allocated to Machining and Assembly in the direct method should be allocated to Job CM-22? How much should be allocated to Job CM-23?

Job cm-22 job cm-23

Machining

Assembly

Solutions

Expert Solution

Please note that we also share solutions as per simultaneos cost allocation method.

Solations as per direct cost allocation method. Your questions suggest us to this method   

ekkarill92 answered 1 year ago
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