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PRACTICE CASE. MOSSY BOG TRANSPORTATION AGENCY
The Mossy Bog Transportation Agency (MBTA) has two service departments (maintenance and administration) and two mission departments (rapid transit and slow transit). Rapid Transit uses high-speed trains and is
highly equipment-intensive, while Slow Transit, using rickshaws, is highly labor-intensive. Management has decided to allocate maintenance costs on the basis of depreciation dollars in each department, and administration costs
on the basis of labor hours worked by the employees in each department.
The following data appear in the agency's records for the current period:
Maintenance Administration Rapid Transit Slow Transit
Direct plus distributed costs ($000)
Depreciation dollars ($000) (1)
Labor hours Total $1,160 $2,400 $8,000 $4,000 $15,560 $200 $2,000 $3,000 $ 800 $6,000 20,000 10,000 10,000 40,000 Note (1). Depreciation dollars are included in the direct cost figures. For...
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This document was uploaded on 03/30/2014.
- Spring '14