Williston Machining is a small manufacturing firm with two production departments, Finishing and Assembly. Its two service departments, Maintenance and the Cafeteria, serve both production departments.
During the current period, the direct costs incurred in each department follow:
|
Department |
Direct Cost |
|
Maintenance |
$ 100,000 |
|
Cafeteria |
17,600 |
|
Finishing |
1,200,000 |
|
Assembly |
640,000 |
|
Total |
$1,957,600 |
Maintenance costs are allocated on the basis of repair hours. Cafeteria costs are allocated on the basis of the number of employees in each department. For the current period, the following table summarizes the usage of services by other service cost centers and other departments:
|
Service Department |
||
|
|
Maintenance (S1) (repair hours) |
Cafeteria (S2) (employees) |
|
Departments |
||
|
Maintenance |
–0– |
30 |
|
Cafeteria |
3,000 |
–0– |
|
Finishing (P1) |
7,500 |
20 |
|
Assembly (P2) |
4,500 |
50 |
|
Total |
15,000 |
100 |
Using the reciprocal method for service cost allocations, what are the total costs in each of the two production departments, Finishing (P1) and Assembly (P2)?