Senen Corporation has two service departments (Maintenance Department and Security Department) and two producing departments (Assembly Department and Finishing Department). The following are the percentage usage of each department.DepartmentsUse of Maintenance DepartmentUse of Security DepartmentMaintenance 5%Security10% Assembly60%40%Finishing30%55%The Maintenance Department cost is $900,000 and the Security Department cost is $500,000.Compute the service cost allocated to Security Department using the direct method.Compute the service cost allocated to Maintenance Department using the step-down/sequential method.

Overhead means the cost incurred indirect in factory for the production of goods. Manufacturing…

Answered: enen Corporation has two service…

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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Senen Corporation has two service departments (Maintenance Department and Security Department) and two producing departments (Assembly Department and Finishing Department). The following are the percentage usage of each department.

Departments	Use of Maintenance Department	Use of Security Department
Maintenance		5%
Security	10%
Assembly	60%	40%
Finishing	30%	55%

The Maintenance Department cost is $900,000 and the Security Department cost is $500,000.

Compute the service cost allocated to Security Department using the direct method.
Compute the service cost allocated to Maintenance Department using the step-down/sequential method.

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