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
Chapter1: Financial Statements And Business Decisions
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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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