RECOMMENDED!!Solaris currently allocates their repair and utility dollars to their assembly
Solaris currently allocates their repair and utility dollars to their assembly, fabricating, and finishing department using the direct method of service center cost allocation. Repair dollars are allocated using direct labor hours and utility dollars are allocated using square footage. DLHRepairSq.Ft Utilities Assembly Fabricating Finishing TotalCosts$10,000,00$12,000,00$6,000,00 $8,000,000$12,000,00$48,000,000Repair8,00015,0006,00010,0009,00048,000Utilities 17,00010,00025,00030,000 45,000 127,000a) Calculate the amounts to be allocated to the production departments using the direct method.b) Calculate the amounts to be allocated to the production departments using the step method.c) Write memo to the President explaining the differences in the results.
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