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Question: Caro 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 August follow:
Proportion of Services Used byDepartmentDirect CostsMaintenanceCafeteriaMachiningAssemblyMachining$107,000 Assembly 80,400 Maintenance 49,600 - 0.2 0.5 0.3 Cafeteria 40,000 0.8 - 0.1 0.1
Assume that both Machining and Assembly work on just two jobs during the month of August: CM-22 and CM-23. Costs are allocated to jobs based on machine-hours in Machining and labor-hours in Assembly. The number of labor- and machine-hours worked in each department are as follows:
Machining Assembly Job CM-22: Machine-hours 350 20 Labor-hours 20 60 Job CM-23: Machine-hours 50 40 Labor-hours 20 140
Required: How much of the service department costs allocated to Machining and Assembly in the direct method should be allocated to Job CM-22? How much should be allocated to Job CM-23?
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