Dis­tribute service department costs directly

Question:

Overhead Distribution. Parker Manufacturing Company has two producing departments, Fabrication and Assembly, and three service departments, General Factory Administration, Factory Maintenance, and Factory Cafeteria. A sum­mary of costs and other data for each department prior to allocation of service department costs for the year ended June 30, 19--, shows:

 Service Departments Producing Fabrications Departments Assembly General Factory Administration Factory Maintenancance Factory Cafeteria Direct labor costs \$1,950,000 \$2,050,000 \$90,000 \$82,100 \$87,000 Direct materials costs. 3,130,000 950,000 65,000 91,000 Factory overhead costs 1,650,000 1,850,000 70,000 56,100 62,000 Direct labor hours 562,500 437,500 31,000 27,000 42,000 Number of employees• 280 200 12 8 20 Square footage occupied • 88,000 72,000 1,750 2,000 4,800

The costs of General Factory Administration, Factory Maintenance, and Factory Cafeteria are allocated on the basis of direct labor hours, square footage occupied, and number of employees, respectively. There are no factory overhead variances. Round all final calculations to the nearest dollar.

Required:

1. Assuming that Parker Manufacturing Company elects to dis­tribute service department costs directly to the producing departments without inter-service department cost allocation, compute the amount of Factory Maintenance costs that would be allocated to Fabrication.

2. Assuming the same policy of allocating service departments to producing departments only, compute the amount of General Factory Administration costs that would be allocated to Assembly.

3. Assuming that Parker Manufacturing Company elects to distribute service department costs to other service departments (starting with the service department with the greatest total costs) as well as to the producing departments and that once a service departments costs have been allocated, no subsequent service department costs are recirculated back to it, compute:

1. The amount of Factory Cafeteria costs that would be allocated to Factory Maintenance.

2. The amount of Factory Maintenance costs that would be allocated to Factory Cafeteria.