Spirits and More operates two departments, Cutting and Fabrication. Two service departments, maintenance and purchasing, are also included within the company. The operating costs and distribution of each service department's efforts to the other departments is as follows: Maintenance Purchasing Operating Costs Maintenance 0% 25% $87,000 Purchasing 35% 0% 16,000 Cutting 15% 60% 80,000 Fabrication 50% 15% 56,000 Using the direct method of allocating support costs, what is the total cost accumulated in the fabrication department? Question options: a) $56,000.00 b) Maintenance Purchasing Costs c) $70,123.00 d) $77,750.00 e) $126,123.00

Spirits and More operates two departments, Cutting and Fabrication. Two service departments, maintenance and purchasing, are also included within the company. The operating costs and distribution of each service department's efforts to the other departments is as follows: Maintenance Purchasing Operating Costs Maintenance 0% 25% $87,000 Purchasing 35% 0% 16,000 Cutting 15% 60% 80,000 Fabrication 50% 15% 56,000 Using the direct method of allocating support costs, what is the total cost accumulated in the fabrication department? Question options: a) $56,000.00 b) Maintenance Purchasing Costs c) $70,123.00 d) $77,750.00 e) $126,123.00

Managerial Accounting

15th Edition

ISBN:9781337912020

Author:Carl Warren, Ph.d. Cma William B. Tayler

Publisher:Carl Warren, Ph.d. Cma William B. Tayler

Chapter5: Support Department And Joint Cost Allocation

Section: Chapter Questions

Problem 6E: Davis Snowflake Co. produces Christmas stockings in its Cutting and Sewing departments. The...

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