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Dean Corporation has two service departments, Power and Maintenance, and two production
departments, Painting and Polishing. The following data have been estimated for next year’s
operations:
Department: Direct Charges Kilowatt Hours Used Square Footage
Power $450,000 20,000 10,000
Maintenance 120,000 50,000 5,000
Painting 235,000 100,000 30,000
Polishing 265,000 150,000 20,000
Distribute the service department costs using the direct distribution method. Prepare journal
entries.
Solution
Date Particulars Debit $ Credit $ Cost-Paining department 180,000 Cost-Polishing
department 270,000 Cost-Power department 450,000 Cost-Paining department
72,000 Cost-Polishing department 48,000 Cost-Maintenance department 120,000

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Dean Corporation has two service departments, Power and Maintenance,.pdf

  • 1. Dean Corporation has two service departments, Power and Maintenance, and two production departments, Painting and Polishing. The following data have been estimated for next year’s operations: Department: Direct Charges Kilowatt Hours Used Square Footage Power $450,000 20,000 10,000 Maintenance 120,000 50,000 5,000 Painting 235,000 100,000 30,000 Polishing 265,000 150,000 20,000 Distribute the service department costs using the direct distribution method. Prepare journal entries. Solution Date Particulars Debit $ Credit $ Cost-Paining department 180,000 Cost-Polishing department 270,000 Cost-Power department 450,000 Cost-Paining department 72,000 Cost-Polishing department 48,000 Cost-Maintenance department 120,000