Salerno Company Has Two Service Departments,Maintenance and Cafeteria,as Well as Two

question 101

Essay

Salerno Company has two service departments,Maintenance and Cafeteria,as well as two production departments,Mixing and Bottling.Maintenance Department costs are allocated based on square footage and Cafeteria Department costs are allocated based on number of employees.The following data was available:
$\begin{array}{lllll}&\text { Maintenance }&\text { Cateteria }&\text { Mixing }&\text { Bottling }\\\text { Direct costs } & \$ 200,000 & \$ 120,000 & \$ 76,000 & \$ 85,000 \\\text { Square footage } & 1,000 & 2,000 & 4,000 & 6,000 \\\text { Number of employees } & 30 & 20 & 60 & 100\end{array}$
Assume the direct method is used to allocate service department costs to producing departments.
Required:
A) Determine the total costs of the Mixing Department after allocating the service departments' costs.
B) Determine the total costs of the Bottling Department after allocating the service departments' costs.

• A) Determine the total costs of the Mixing Department after allocating the service departments' costs.
• B) Determine the total costs of the Bottling Department after allocating the service departments' costs.

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