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Cordner Corporation has two production departments, P1 and P2, and two service departments, S1 and S2. Direct costs for each department and the proportion of service costs used by the various departments for the month of July are as follows: Department S1 S2 P1 P2 $30,000 $62,500 $0 Direct costs $ 60,000 $100,000 $160,000 $140,000 $20,000 S1 Under the direct method of cost allocation, the amount of S1 costs allocated to S2 would be: 0.20 Proportion of Services Used by: S2 P1 0.70 0.10 0.30 P2 0.20 0.50

Cordner Corporation has two production departments, P1 and P2, and two service departments, S1 and S2. Direct costs for each department and the proportion of service costs used by the various departments for the month of July are as follows: Department S1 S2 P1 P2 $30,000 $62,500 $0 Direct costs $ 60,000 $100,000 $160,000 $140,000 $20,000 S1 Under the direct method of cost allocation, the amount of S1 costs allocated to S2 would be: 0.20 Proportion of Services Used by: S2 P1 0.70 0.10 0.30 P2 0.20 0.50

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Cordner Corporation has two production departments, P1 and P2, and two service departments, S1 and S2. Direct costs for each department and the proportion of service costs used by the various departments for the month of July are as follows: Department S1 $30,000 $62,500 $0 S2 P1 P2 $20,000 Direct costs $60,000 $100,000 $160,000 $140,000 S1 0.20 Under the direct method of cost allocation, the amount of S1 costs allocated to S2 would be: Proportion of Services Used by: P1 0.10 0.30 S2 0.70 P2 0.20 0.50
Transcribed Image Text:Cordner Corporation has two production departments, P1 and P2, and two service departments, S1 and S2. Direct costs for each department and the proportion of service costs used by the various departments for the month of July are as follows: Department S1 $30,000 $62,500 $0 S2 P1 P2 $20,000 Direct costs $60,000 $100,000 $160,000 $140,000 S1 0.20 Under the direct method of cost allocation, the amount of S1 costs allocated to S2 would be: Proportion of Services Used by: P1 0.10 0.30 S2 0.70 P2 0.20 0.50
Upton Company produces two main products and a by-product out of a joint process. The ratio of output quantities to input quantities of direct material used in the joint process remains consistent from month to month. Upton has employed the physical quantities method to allocate joint production costs to the two main products. The net realizable value of the by-product is used to reduce the joint production costs before the joint costs are allocated to the main products. Data regarding Upton's operations for the current month are presented in the chart below. During the month, Upton incurred joint production costs of $2,520,000. The main products are not marketable at the split-off point and, thus, have to be processed further. Monthly output in pounds Selling Price per pound Separable process costs O $1,500,000 $1,260,000 The amount of joint production cost that Upton would allocate to the Second Main Product by using the physical quantities method to allocate joint production costs would be: $1,200,000 First Main Product Second Main Product 90.000 150,000 30 $ 14 540,000 $ 660,000 O $1,575,000 $ $ By-Product 60,000 $ 2
Transcribed Image Text:Upton Company produces two main products and a by-product out of a joint process. The ratio of output quantities to input quantities of direct material used in the joint process remains consistent from month to month. Upton has employed the physical quantities method to allocate joint production costs to the two main products. The net realizable value of the by-product is used to reduce the joint production costs before the joint costs are allocated to the main products. Data regarding Upton's operations for the current month are presented in the chart below. During the month, Upton incurred joint production costs of $2,520,000. The main products are not marketable at the split-off point and, thus, have to be processed further. Monthly output in pounds Selling Price per pound Separable process costs O $1,500,000 $1,260,000 The amount of joint production cost that Upton would allocate to the Second Main Product by using the physical quantities method to allocate joint production costs would be: $1,200,000 First Main Product Second Main Product 90.000 150,000 30 $ 14 540,000 $ 660,000 O $1,575,000 $ $ By-Product 60,000 $ 2
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