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