Maintenance and cafeteria

Question

Warren Ltd. has two production departments, Building A and Building B, and two service departments, Maintenance and Cafeteria. Direct costs for each department and the proportion of service costs used by the various departments for the month of June follow:

 

				Proportion of Services Used by
Department	Direct Costs			Maintenance		Cafeteria		Building A		Building B
Building A	$	500,000
Building B		324,000
Maintenance		183,000		-		0.3		0.4		0.3
Cafeteria		150,000		0.8		-		0.1		0.1

 

Required

Use the reciprocal method to allocate the service costs. (Matrix algebra is not required.) (Note: Due to rounding, the cost allocations to the various departments may not add up to the total service department costs being allocated.) (Do not round intermediate calculations. Leave no cells blank - be certain to enter "0" wherever required. Round your answers to the nearest dollar amount. Amounts to be deducted should be indicated with a minus sign. Omit the "$" sign in your response.)

 

	Cost Allocated To:
From:	Maintenance	Cafeteria	Building A	Building B
Service department costs	$	$	$	$
Maintenance
Cafeteria
Total	$	$	$	$