San rafeal company has two production departments assembly

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San Rafeal Company has two production departments, assembly and finishing, and two service department, machine setup and inspection. Machine setup costs are allocated on the basis of number of setups, while inspection costs are allocated on the basis of number of direct labor hours. Selected information on the four departments follows:

1. How do I use the direct method, to determine the amount of machine setup costs allocated to the two production departments?

2. Using the direct method, determine the amount of inspection costs allocated to the two production departments.

Item                                 Direct costs                 #0f Setups                       Direct Labor hours
Machine setup                   $40,000                            0                                         0
Inspection                         $15,000                            0                                         0
Assembly                          $25,000                         300                                      200
Finishing                            $20,000                         100                                      500

Reference no: EM13597945

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