In: Accounting
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 | % | 10 | % | 30 | % | 60 | % | |||
Support | 20 | % | 0 | % | 45 | % | 35 | % | |||
The direct operating costs of the departments (including both variable and fixed costs) were as follows:
Design | $ | 140,000 |
Engineering Support | $ | 160,000 |
Assembly | $ | 550,000 |
Finishing | $ | 840,000 |
The total cost accumulated in the finishing 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):
A. $1,890,000
B. $682,551
C. $1,007,449
D. $1,062,857
E. $627,143