Question

Becker Tabletops has two support departments (Janitorial and Cafeteria) and two production departments (Cutting and Assembly). Relevant details for these departments are as follows:

Support Department		Cost Driver
Janitorial Department		Square footage to be serviced
Cafeteria Department		Number of employees

	Janitorial Department	Cafeteria Department	Cutting Department	Assembly Department
Department costs	$280,000	$180,000	$1,480,000	$680,000
Square feet	50	4,800	500	4,500
Number of employees	10	3	16	4

Allocate the support department costs to the production departments using the direct method.

	Cutting Department		Assembly Department
Janitorial Department cost allocation	$fill in the blank 1		$fill in the blank 2
Cafeteria Department cost allocation	$fill in the blank 3		$fill in the blank 4

Answer 1

Solution:

	Cutting department	Assembly department	Total
Square feet	500	4,500	5,000
Number of employees	16	4	20

	Cutting department	Assembly department
Janitorial Department cost allocation	$28,000 [ $280,000 * 500/5,000 ]	$252,000 [ $280,000 * 4,500/5,000 ]
Cafeteria Department cost allocation	$144,000 [ $180,000 * 16/20 ]	$36,000 [ $180,000 * 4/20 ]

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