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Question - Cost Allocation - Direct Method
Costalot 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 November follow:
Department Direct Costs Maintenance. Cafeteria. Machining. Assembly
Machining. $109,000
Assembly 67,000
Maintenance 55,000 30% 50%. 20%
Cafeteria 36,000. 75% 15%. 10%
Required - Compute the allocation of the service departments' costs to producing departments using the direct method.
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