Fans Company has two service departments — product design and engineering support, and two production departments — assembly and finishing. The distribution of each service department's efforts to the other departments is shown below: SERVICE DEPARTMENT
Fans Company has two service departments — product design and engineering support, and two production departments — assembly and finishing. The distribution of each service department's efforts to the other departments is shown below: SERVICE DEPARTMENT
Principles of Cost Accounting
17th Edition
ISBN:9781305087408
Author:Edward J. Vanderbeck, Maria R. Mitchell
Publisher:Edward J. Vanderbeck, Maria R. Mitchell
Chapter4: Accounting For Factory Overhead
Section: Chapter Questions
Problem 9E: A manufacturing company has two service and two production departments. Human Resources and Machine...
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Fans Company has two service departments — product design and engineering support, and two production departments — assembly and finishing. The distribution of each service department's efforts to the other departments is shown below:
SERVICE DEPARTMENT | SERVICES PROVIDED TO | |||
---|---|---|---|---|
Design | Support | Assembly | Finishing | |
Product Design | 0% | 10% | 30% | 60% |
Engineering Support | 20% | 0% | 45% | 35% |
The direct operating costs of the departments (including both variable and fixed costs) were as follows:
Product Design | $ 170,000 |
---|---|
Engineering Support | $ 150,000 |
Assembly | $ 560,000 |
Finishing | $ 850,000 |
The total cost accumulated in the finishing department using the step method is (calculate all ratios and percentages to 4 decimal places, for example 33.3333%, and round all dollar amounts to the nearest whole dollar assume that the engineering support department goes first):
Multiple Choice
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$1,035,833.
-
$1,930,000.
-
$694,167.
-
$646,292.
-
$958,708.
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