Reference no: EM13777587
Cougar Company has two service departments, Maintenance and Cafeteria, as well as two production departments, Mixing and Finishing. Maintenance Department costs are allocated based on direct labor hours and Cafeteria Department costs are allocated based on number of employees. The following data are available:
Maintenance Cafeteria Mixing Finishing
Direct costs $7,000 $2,800 $1,200 $400
Direct labor hours 180 50 20 10
Number of employees 36 120 540 60
Assume the step-down method of allocating service departments' costs is used. The Maintenance
Department renders the greatest service and is allocated first.
Required:
A) Determine the total costs of the Mixing Department after allocating the service departments' costs.
B) Determine the total costs of the Finishing Department after allocating the service departments' costs.
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