The following is a system of simultaneous linear equations to allocate costs using the reciprocal method. Matrix algebra is not required. The following costs were incurred in three operating departments and three service departments in Westmoreland Company. Department Direct Costs Label Subassemblies $570,000 P1 Final assembly Marketing Building occupancy Research & development 795,000 P2 305,000 P3 105,000 si 140,000 S2 Supervision 65,000 S3 Jse of services by other departments is as follows. User Departments Sub- Final Building Service Cost Center assemblies Assembly Marketing Осcuрancy R&D Supervision Building occupancy 0.30 0.20 0.20 0.15 0.15 --- R&D 0.50 0.50 --- --- --- --- Supervision 0.20 8.30 0.20 0.20 0.10
The following is a system of simultaneous linear equations to allocate costs using the reciprocal method. Matrix algebra is not required. The following costs were incurred in three operating departments and three service departments in Westmoreland Company. Department Direct Costs Label Subassemblies $570,000 P1 Final assembly Marketing Building occupancy Research & development 795,000 P2 305,000 P3 105,000 si 140,000 S2 Supervision 65,000 S3 Jse of services by other departments is as follows. User Departments Sub- Final Building Service Cost Center assemblies Assembly Marketing Осcuрancy R&D Supervision Building occupancy 0.30 0.20 0.20 0.15 0.15 --- R&D 0.50 0.50 --- --- --- --- Supervision 0.20 8.30 0.20 0.20 0.10
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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