Hildale Manufacturing is organized with two service departments (Administration and Maintenance) and two production departments (Assembly and Finishing). The company uses the step method to allocate service department costs, allocating costs from Administration first. In March, $148,000 was allocated from Maintenance to Assembly (including any cost allocated from Administration to Maintenance). In addition, $31,000 was allocated from Administration to Maintenance in March. Assembly used 25 percent of Maintenance services and Finishing used 75 percent of Maintenance services in March. Finally, Maintenance used 20 percent of Administration services in March.

Hildale Manufacturing is organized with two service departments (Administration and Maintenance) and two production departments (Assembly and Finishing). The company uses the step method to allocate service department costs, allocating costs from Administration first. In March, $148,000 was allocated from Maintenance to Assembly (including any cost allocated from Administration to Maintenance). In addition, $31,000 was allocated from Administration to Maintenance in March. Assembly used 25 percent of Maintenance services and Finishing used 75 percent of Maintenance services in March. Finally, Maintenance used 20 percent of Administration services in March.

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Principles of Cost Accounting

17th Edition

ISBN:9781305087408

Author:Edward J. Vanderbeck, Maria R. Mitchell

Publisher:Edward J. Vanderbeck, Maria R. Mitchell

Chapter10: Cost Analysis For Management Decision Making

Section: Chapter Questions

Problem 7E: Columbia Products Inc. has two divisions, Salem and Seaside. For the month ended March 31, Salem had...

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