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Question - The Dexter Manufacturing Company has two production departments (Assembly and Finishing) and two service departments (Human Resources and Janitorial). The projected usage of the two service departments is as follows:
Use of Human Resources
Use of Janitorial
Human Resources
---
5%
Janitorial
15%
Assembly
50%
45%
Finishing
35%
The budgeted costs in the service departments are: Human Resources, $90,000 and Janitorial, $50,000.
i) Using the direct method, calculate the amount of Janitorial Department cost allocated to the Finishing Department.
ii) Using the step-down method and assuming the Janitorial Department is allocated first, calculate the total amount of service department cost allocated to the Assembly Department and the Finishing Department respectively.
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