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

Essay

Evermore Company has two service departments,Maintenance and Cafeteria,as well as two production departments,Mixing and Finishing.Maintenance Department costs are allocated based on direct labor hours and Cafeteria Department costs are allocated based on number of employees.The following data are available:
$\begin{array}{lllll}&\text { Maintenance }&\text { Cafeteria }&\text { Mixing }&\text { Finishing }\\\text { Direct costs } & \$ 7,000 & \$ 2,800 & \$ 1,200 & \$ 400 \\\text { Direct labor hours }& 180 & 50 & 20 & 10 \\\text { Number of employees } & 36 & 120 & 540 & 60\end{array}$
Assume the step-down method of allocating service departments' costs is used.Assume the Maintenance Department is allocated first.
Required:
A) Determine the total costs of the Mixing Department after allocating the service departments' costs.
B) Determine the total costs of the Finishing Department after allocating the service departments' costs.