14. (10 points) Ortiz Manufacturing has two support departments: Human Resources and Facilities and two...
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14. (10 points) Ortiz Manufacturing has two support departments: Human Resources and Facilities and two operating departments: Fabrication and Assembly. Data for each department is as follows:
Support Departments
Operating Departments
Human Resources Department
Maintenance Department
Fabrication
Assembly
Number of maintenance hours
100
N/A
480
320
Number of employees
N/A
20
80
240
Human Resources costs equal $200,000 and are allocated based on the number of employees. Maintenance Department costs equal $160,000 and are allocated based on maintenance hours. a. Using the direct method, calculate the support department costs allocated to the operating departments Fabrication and Assembly respectively. b. Using the step-down method and ranking first the support department that provides the largest (highest percentage) service to the other service department, what is the allocation of support department costs to the operating departments Fabrication and Assembly? (round intermediate calculations to four decimals, round answers to dollars)
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