Happy Burger Co, has a commissary that supplies food and other products to its and maintenance (S2), which support two operating departments, food products (PI) restaurants. It has two service departments, computer services (S1) and administration and supplies (P2). As internal auditor, you are checking the procedures for cost allocation and find the following results: Costs allocated to PI: P 30,000 from S I ? from S2 Costs allocated to P2: P 15,000 from S2 ? from S1 Total costs for the two service departments P 80,000 $2's services are provided as follows: 20% to S1 50% to P1 30% to P2 28. Using direct method of allocating scrvice department costs, compute the total service department costs incurred by S2. a. Zero b. P 20,625 c. P 40,000 d. P 50,000
Happy Burger Co, has a commissary that supplies food and other products to its and maintenance (S2), which support two operating departments, food products (PI) restaurants. It has two service departments, computer services (S1) and administration and supplies (P2). As internal auditor, you are checking the procedures for cost allocation and find the following results: Costs allocated to PI: P 30,000 from S I ? from S2 Costs allocated to P2: P 15,000 from S2 ? from S1 Total costs for the two service departments P 80,000 $2's services are provided as follows: 20% to S1 50% to P1 30% to P2 28. Using direct method of allocating scrvice department costs, compute the total service department costs incurred by S2. a. Zero b. P 20,625 c. P 40,000 d. P 50,000
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Happy Burger Co. has a commissary that supplies food and other products to its
restaurants. It has two service departments, computer services (S1) and administration
and supplies (P2). As internal auditor, you arc checking the procedures for cost
and maintenance (S2), which support two operating departments, food products (PI)
Cost Accounting
256
and supplies (P2). As internal auditor, you are checking the procedures for )
allocation and find the following results:
Costs allocated to PT;
P 30,000 from SI
? from S2
Costs allocated to P2:
P 15,000 from S2
? from S1
Total costs for the two service departments P 80,000
S2's services are provided as follows:
20% to S1
50% to P1
30% to P2
28. Using direct method of allocating scrvice department costs, compute the total
service department costs incurred by S2.d la bili 2a bob. 34 2
a. Zero
b. Р20,625
с. Р40,000
d. P 50,000
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