Midland Resources has two production departments (Fabrication and Assembly) and three service departments (Engineering,Administration, and Maintenance). During July, the following costs and service department usage ratios were recorded.SupplyingDepartmentEngineeringAdministrationMaintenanceDirect costEngineeringAdministrationMaintenanceUsing DepartmentEngineering Administration Maintenance FabricationTotal010%0$30,00050%030%Costs$213,300Allocated to:Fabrication020%0$40,000Required:Allocate the service department costs to the two operating departments using the reciprocal method. (Do not round intermediatecalculations.)Assembly10%50%15%$200,000Assembly40%20%55%$50,000

Name: Midland Resources has two production departments (Fabrication and Ass
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Description: Midland Resources has two production departments (Fabrication and Assembly) and three service departments (Engineering,Administration, and Maintenance). During July, the following costs and service department usage ratios were recorded.SupplyingDepa

Reciprocal method is a method to allocate cost of service deepartment . Under this menthod a set…

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Midland Resources has two production departments (Fabrication and Assembly) and three service departments (Engineering, Administration, and Maintenance). During July, the following costs and service department usage ratios were recorded. Supplying Department Engineering Administration Maintenance. Direct cost Engineering Administration Maintenance Engineering 0 10% 0 Total $30,000 Using Department Administration Maintenance Costs 50% 0 30% $213,300 Allocated to: Fabrication 0 20% 0 $40,000 Assembly Fabrication Required: Allocate the service department costs to the two operating departments using the reciprocal method. (Do not round intermediate calculations.) 10% 50% 15% $200,000 Assembly 40% 20% 55% $50,000

Midland Resources has two production departments (Fabrication and Assembly) and three service departments (Engineering, Administration, and Maintenance). During July, the following costs and service department usage ratios were recorded. Supplying Department Engineering Administration Maintenance. Direct cost Engineering Administration Maintenance Engineering 0 10% 0 Total $30,000 Using Department Administration Maintenance Costs 50% 0 30% $213,300 Allocated to: Fabrication 0 20% 0 $40,000 Assembly Fabrication Required: Allocate the service department costs to the two operating departments using the reciprocal method. (Do not round intermediate calculations.) 10% 50% 15% $200,000 Assembly 40% 20% 55% $50,000

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter7: Allocating Costs Of Support Departments And Joint Products

Section: Chapter Questions

Problem 28E: Minor Co. has a job order cost system and applies overhead based on departmental rates. Service...

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