Question: Barley 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:
|
TO/FROM
|
Design
|
Support
|
Assembly
|
Finishing
|
|
Design
|
0%
|
10%
|
30%
|
60%
|
|
Support
|
20%
|
0%
|
45%
|
35%
|
The direct operating costs of the departments (including both variable and fixed costs) were as follows:
Design $310,000
Engineering Support $330,000
Assembly $1,230,000
Finishing $1,860,000
Required: Calculate the total cost accumulated in the finishing department using the step method.
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