Question - The Dexter Manufacturing Company has two production departments (Assembly and Finishing) and two service departments (Human Resources and Janitorial). The projected usage of the two service departments is as follows:
|
Use of Human Resources
|
Use of Janitorial
|
|
Human Resources
|
---
|
5%
|
|
Janitorial
|
15%
|
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|
|
Assembly
|
50%
|
45%
|
|
Finishing
|
35%
|
50%
|
The budgeted costs in the service departments are: Human Resources, $90,000 and Janitorial, $50,000.
i) Using the direct method, calculate the amount of Janitorial Department cost allocated to the Finishing Department.
ii) Using the step-down method and assuming the Janitorial Department is allocated first, calculate the total amount of service department cost allocated to the Assembly Department and the Finishing Department respectively.