Solution-Find operating departments by the direct method

Find operating departments by the direct method

Reference no: EM133045107

Delta Manufacturing Company has two Service Departments-Custodial Services and Maintenance-and three Production Departments-Cutting, Milling, and Assembly. Delta allocates the cost of Custodial Services on the basis of square metres and Maintenance on the basis of labour hours. Budgeted operating data for the year just completed follow:

	Service Departments	Production Departments
	Custodial Services	Maintenance	Cutting	Milling	Assembly
Budgeted costs before allocation	$20,000	$8,000	$90,000	$50,000	$100,000
Square metres	1,000	10,500	5,000	17,000	13,000
Labour-hours			4,220	8,000	8,000

Required:

Allocate service department costs to operating departments by the direct method
Allocate service department costs to operating departments by the step method.

Reference no: EM133045107

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Find operating departments by the direct method

Reference no: EM133045107

Reference no: EM133045107

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