What is the amount of service department cost allocated to P1 and P2 using the direct method
What is the amount of service department cost allocated to P1 and P2 using the direct method
Cornerstones of Cost Management (Cornerstones Series)
4th Edition
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Don R. Hansen, Maryanne M. Mowen
Chapter7: Allocating Costs Of Support Departments And Joint Products
Section: Chapter Questions
Problem 23E: Refer to the data in Exercise 7.22. The company has decided to simplify its method of allocating...
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The following information is departmental cost allocation with two service departments and two production departments.
|
Percentage Service Provided to |
|||||||||||||||
Department | Cost | S1 | S2 | P1 | P2 | |||||||||||
Service 1 (S1) | $ | 47,000 | 0 | % | 20 | % | 40 | % | 40 | % | ||||||
Service 2 (S2) | 37,000 | 20 | 0 | 20 | 60 | |||||||||||
Production 1 (P1) | 270,000 | |||||||||||||||
Production 2 (P2) | 320,000 | |||||||||||||||
What is the amount of service department cost allocated to P1 and P2 using the direct method?
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Direct method of service cost allocation
Direct method of service cost allocation is the simplest and easiest method of service cost allocation as under this method service cost is allocated to production department only
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Can you show me the calculations to get these numbers: 40/80, 40/80, 20/80, 60/80
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