A company has two service departments (S1 and S2) and two manufacturing divisions (MI and M2). The following information is available. Percent Allocable to Costs lasured Service Department SI S2 20% MI 30% 20% M2 50% 30% $290,000 500,000 50% Show how much costs will be Allocated to MI and M2 using: 1. Prepare the Distribution of Costs using the Direct Method 2. Prepare the Distribution of Costs using the Step Method 3. Prepare the Dsitribution of Costs using the Reciprocal Method SHOW ALL WORK - ANSWERS ONLY WILL GIVEN MINIMAL CREDIT

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Question

Accounting 

 

A company has two service departments (S1 and S2) and two manufacturing divisions (MI and M2). The following information is available.
Percent Allocable to
Costs lacurred
Service
SI
Department
SI
S2
S2
20%
MI
30%
20
M2
50%
5290,000
500,00
50%
30%
Show how much costs will be Allocated to MI and M2 using :
1. Prepare the Distribution of Costs using the Direct Method
2. Prepare the Distribution of Costs using the Step Method
3. Prepare the Dsatribution of Costs using the Reciprocal Method
SHOW ALL WORK - ANSWERS ONLY WILL GIVEN MINIMAL CREDIT
Transcribed Image Text:A company has two service departments (S1 and S2) and two manufacturing divisions (MI and M2). The following information is available. Percent Allocable to Costs lacurred Service SI Department SI S2 S2 20% MI 30% 20 M2 50% 5290,000 500,00 50% 30% Show how much costs will be Allocated to MI and M2 using : 1. Prepare the Distribution of Costs using the Direct Method 2. Prepare the Distribution of Costs using the Step Method 3. Prepare the Dsatribution of Costs using the Reciprocal Method SHOW ALL WORK - ANSWERS ONLY WILL GIVEN MINIMAL CREDIT
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