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CASE STUDY CASE: Expenditures incurred in a manufacturing company are as follows: SUPPORTING DEPARTMENTS Cafeteria Heating TOTAL COSTS Direct Material Direct Labor Indirect Material Indirect Labor Electricity Water PRODUCTION DEPARTMENTS Cutting Assembly 175.000,00 100.000,00 135.000,00 80.000,00 25.000,00 10.000,00 15.000,00 12.000,00 ? ? ? ? 20.000,00 30.000,00 9,000.00 22.000,00 ? 275.000,00 215.000,00 64.000,00 79.000,00 156.000,00 23.000,00 ? ? ? Rent Insurance Tax Depreciation 40.000,00 24.000,00 12.000,00 ? 40.000,00 59.000,00 39.000,00 65.000,00 35.000,00 16.000,00 ? 6.000,00 ? 5.000,00 2 ALLOCATION BASES KW per hour Liter Square meters 14,00 196,00 308,00 32,00 152,00 615,00 96,00 87,00 1.615,00 58,00 65,00 2.462,00 200,00 500,00 5.000,00 INSTRUCTIONS Q1: Suppose that there is a counter to measure electricity usage in the Cutting Department, and a counter to measure water usage in the Assembly Department. Electricity usage in the Cutting Department is 72.800 TL, while water usage in the Assembly Department is 4.730 TL. Complete the table by allocating costs appropriately (First Allocation) (20 points) Q2: After completing the previous task, re-allocate the costs by considering the information below (Second Allocation). Cafeteria Heating Cutting Assembly SERVICES PROVIDED Cafeteria (# of employees) Heating (Square meters) 10,00 308,00 20,00 615,00 500,00 1.615,00 400,00 2.462,00 930,00 5.000,00 a. Prepare a cost allocation table by using Direct Method. Journalize the ending balances of costs. (20 points) b. Prepare a cost allocation table by using Step-Down Method. Assume that Cafeteria ranks number 1. Journalize the ending balances of costs. (25 points) c. Prepare a cost allocation table by using Reciprocal Method. Journalize the ending balances of costs. (35 points)

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