Fundamentals of Cost Accounting: P11-1 Warren Ltd. has two production departments

Fundamentals of Cost Accounting
P11-1 Cost Allocation: Step Method
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:
Proportion of Services Used by
Department Direct Costs Maintenance Cafeteria Building A Building B
Building A 495,000
Building B 322,000
Maintenance 200,000 0.2 0.5 0.3
Cafeteria 160,000 0.8 0.1 0.1

Use the step method to allocate the service costs, using the following:
a. The order of allocation starts with Maintenance. (Do not round intermediate calculations.)
b. The allocations are made in the reverse order (starting with Cafeteria). (Do not round intermediate calculations.)
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