(Appendix 4B)Delta Manufacturing Company has two Service Departments-Custodial Services and Maintenance-and three Production Departments-Cutting,Milling,and Assembly.Delta allocates the cost of Custodial Services on the basis of square metres and Maintenance on the basis of labour hours.Budgeted operating data for the year just completed follow:

Required:

a) Prepare a schedule to allocate Service Department costs to the Production Departments by the direct method, rounding all dollar amounts to the nearest whole dollar.
b) Prepare a schedule to allocate Service Department costs to the Production Departments by the step-down method, allocating Custodial Services first, and rounding all amounts to the nearest whole dollar

Question

(Appendix 4B)Delta Manufacturing Company has two Service Departments-Custodial Services and Maintenance-and three Production Departments-Cutting,Milling,and Assembly.Delta allocates the cost of Custodial Services on the basis of square metres and Maintenance on the basis of labour hours.Budgeted operating data for the year just completed follow:

Required:

a) Prepare a schedule to allocate Service Department costs to the Production Departments by the direct method, rounding all dollar amounts to the nearest whole dollar.
b) Prepare a schedule to allocate Service Department costs to the Production Departments by the step-down method, allocating Custodial Services first, and rounding all amounts to the nearest whole dollar

Quizplus · Accepted Answer

The Answer of (Appendix 4B)Delta Manufacturing Company has two Service Departments-Custodial Services and Maintenance-and three Production Departments-Cutting,Milling,and Assembly.Delta allocates the cost of Custodial Services on the basis of square metres and Maintenance on the basis of labour hours.Budgeted operating data for the year just completed follow:

Required:

a) Prepare a schedule to allocate Service Department costs to the Production Departments by the direct method, rounding all dollar amounts to the nearest whole dollar.
b) Prepare a schedule to allocate Service Department costs to the Production Departments by the step-down method, allocating Custodial Services first, and rounding all amounts to the nearest whole dollar

(Appendix 4B)Delta Manufacturing Company Has Two Service Departments-Custodial Services and Maintenance-And