Question

Using the direct method, Pone Hill Company allocates Janitorial Department costs based on square footage serviced. It allocates Cafeteria Department costs based on the number of employees served. It has the following information about its two service departments and two production departments, Cutting and Assembly:

Square Feet Number of
Employees
Janitorial Department 100 20
Cafeteria Department 10,000 10
Cutting Department 2,000 60
Assembly Department 8,000 20
The percentage (proportional) usage of the Janitorial Department by the Cutting Department is

Answer 1

Answer:

Cutting department= 9.9%

Explanation:

Giving the following information:

Using the direct method, Pone Hill Company allocates Janitorial Department costs based on square footage serviced.

Square Feet

Janitorial Department 100

Cafeteria Department 10,000

Cutting Department 2,000

Assembly Department 8,000

Total square feet= 20,100

Cutting department= 2,000/20,100= 9.9%