Yumee Products Inc. is divided into five departments, Mixing, Blending, Finishing, Factory Office, a

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Description

Distribution of service department costs to production departments using the direct method similar to 

Yumee Products Inc. is divided into five departments, Mixing, Blending, Finishing, Factory Office, and Building Maintenance. The first three departments are engaged in production work. Factory Office and Building Maintenance are service departments. During the month of June, the following factory overhead was incurred for the departments:
Mixing $21,000
Blending $18,000
Finishing $25,000
Factory Office $9,000
Building Maintenance $6,400

The bases for distributing service department expenses to the other departments follow: Building Maintenance – ­On the basis of floor space occupied by the other departments as follows: Mixing, 10,000 sq ft; Blending, 4,500 sq ft; Finishing, 10,500 sq ft; and Factory Office, 7,000 sq ft.

Factory Office­ – On the basis of number of employees as follows: Mixing, 30; Blending, 20; and Finishing, 50.

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