Hartwicke Manufacturing Company has two service departments - product design and engineering support,and two production departments - assembly and finishing.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: Design $120,000.Engineering Support $240,000.Assembly $660,000.Finishing $870,000.The total cost accumulated in the assembly department using the direct method is (calculate all ratios and percentages to 4 decimal places,for example 33.3333%,and round all dollar amounts to the nearest whole dollar):

Question

Hartwicke Manufacturing Company has two service departments - product design and engineering support,and two production departments - assembly and finishing.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: Design $120,000.Engineering Support $240,000.Assembly $660,000.Finishing $870,000.The total cost accumulated in the assembly department using the direct method is (calculate all ratios and percentages to 4 decimal places,for example 33.3333%,and round all dollar amounts to the nearest whole dollar):

Quizplus · Accepted Answer

Using the direct method, we need to allocate the service department costs to the production departments first. 
Allocating Design: 
Assembly = 30% x $120,000 = $36,000 
Finishing = 70% x $120,000 = $84,000

Allocating Engineering Support: 
Assembly = 60% x $240,000 = $144,000 
Finishing = 40% x $240,000 = $96,000

Now we can add up the total costs for Assembly and Finishing: 
Assembly = $660,000 + $36,000 + $144,000 = $840,000 
Finishing = $870,000 + $84,000 + $96,000 = $1,050,000

Therefore, the total cost accumulated in the assembly department using the direct method is $840,000.

Hartwicke Manufacturing Company Has Two Service Departments - Product Design