Question

Cafeteria Department Cutting Department Assembly Department Janitorial Department cost allocation $155,000 $31,000 $124,000 Cafeteria Department cost allocation $243,000 $81,000 Compare the total support department costs allocated to each production department under each cost allocation method. a. Which production department is allocated the most support department costs under the direct method?

Answer 1

Answer: Assembly Department

Explanation:

Missing part of question is attached below.

Cutting Department

Under the direct method, the Cutting Department is allocated $62,000 of the Janitorial cost and $126,750 of the Cafeteria cost for a total of:

= 62,000 + 126,750

= $188,750

Assembly department

Allocated $248,000 of the Janitorial cost and $42,450 of Cafeteria:

= 248,000 + 42,450

= $290,450

Assembly Department is therefore the department that is allocated the most support department costs under the direct method.