FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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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
50%
Using Department
Engineering
Administration Maintenance
Fabrication
Assembly
Ө
10%
0
0
20%
0
20%
0
10%
40%
50%
20%
20%
60%
Direct cost
$28,000
$217,600
$25,000
$195,000
$50,000
Required:
Allocate the service department costs to the two operating departments using the reciprocal method. (Do not round intermediate
calculations.)
Engineering
Administration
Maintenance
Total
Costs
Allocated to:
Fabrication
Assembly
$
0 $
0
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Transcribed Image Text: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 50% Using Department Engineering Administration Maintenance Fabrication Assembly Ө 10% 0 0 20% 0 20% 0 10% 40% 50% 20% 20% 60% Direct cost $28,000 $217,600 $25,000 $195,000 $50,000 Required: Allocate the service department costs to the two operating departments using the reciprocal method. (Do not round intermediate calculations.) Engineering Administration Maintenance Total Costs Allocated to: Fabrication Assembly $ 0 $ 0
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