A grocery has provided the following data to be used in its service departmenhour 4000 S5700-S2요Operating Departments$2,320,000 $950,0003,1007404,0001,000Service Departments$150,000370Space occupied-ft Sq2500/09.76Using the reciprocal method allocate the costs of the service departments to the two operating departments.Costs before allocationsEmployee-hours S$40,000PAH 160170=1000

The method which has to be used in the cost allocation of the two services departments which has…

Answered: 264.76 Using the reciprocal method…

Business

Accounting

264.76 Using the reciprocal method allocate the costs of the service departments to the two operating departments.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Concept explainers

Overheads

In cost accounting, overhead refers to those expenses which occur during the operating of a business. Overhead includes the fixed, variable, or semi-variable which is not directly involved with a company product or service. It is very important to analyze overhead expense as it helps the company in determining how much a company must charge for its products and services so that they can generate profit. Overhead expenses depend upon the nature of the business operations.

Question

A grocery has provided the following data to be used in its service departmen
hour 4000 S
5700-S2
요
Operating Departments
$2,320,000 $950,000
3,100
740
4,000
1,000
Service Departments
$150,000
370
Space occupied-ft Sq
250
0/09.76
Using the reciprocal method allocate the costs of the service departments to the two operating departments.
Costs before allocations
Employee-hours S
$40,000
PAH 160
170
=1000

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