The Chapman Manufacturing Company has two service departments - manufacturing support and facilities management, and two production departments - assembly and packing/shipping. The distribution of each service department's efforts to the other departments is shown below: The direct operating costs of the departments (including both variable and fixed costs) were as follows: Required:
(calculate all ratios and percentages to 2 decimal places, for example 33.33%, and round all dollar amounts to the nearest whole dollar):
(1) Allocate the service department costs to the production departments using the direct method.
(2) Allocate the service department costs to the production departments using the step method with the support department going first.
(3) Allocate the service department costs to the production departments using the reciprocal method.

Question

The Chapman Manufacturing Company has two service departments - manufacturing support and facilities management, and two production departments - assembly and packing/shipping. The distribution of each service department's efforts to the other departments is shown below:  The direct operating costs of the departments (including both variable and fixed costs) were as follows:  Required:
(calculate all ratios and percentages to 2 decimal places, for example 33.33%, and round all dollar amounts to the nearest whole dollar):
(1) Allocate the service department costs to the production departments using the direct method.
(2) Allocate the service department costs to the production departments using the step method with the support department going first.
(3) Allocate the service department costs to the production departments using the reciprocal method.

Quizplus · Accepted Answer

The Answer of The Chapman Manufacturing Company has two service departments - manufacturing support and facilities management, and two production departments - assembly and packing/shipping. The distribution of each service department's efforts to the other departments is shown below:  The direct operating costs of the departments (including both variable and fixed costs) were as follows:  Required:
(calculate all ratios and percentages to 2 decimal places, for example 33.33%, and round all dollar amounts to the nearest whole dollar):
(1) Allocate the service department costs to the production departments using the direct method.
(2) Allocate the service department costs to the production departments using the step method with the support department going first.
(3) Allocate the service department costs to the production departments using the reciprocal method.

The Chapman Manufacturing Company Has Two Service Departments - Manufacturing