Lido Corp. has a commissary that supplies food and other products to its franchisees. It has two service departments, computer services (SI) and administration and maintenance (S2), which support two operating departments, food products (P1) and supplies (P2). As internal auditor, you are checking the procedures for cost allocation and find the following results: Cost allocated to P1 P30,000 from S1 ? from S2 Cost allocated to P2 P37,500 from S2 ? from S1 P150,000 Total costs for the two service departments S2's service is provided as follows: 20 percent to S1 50 percent to P1 30 percent to P2 The direct method of allocating is used.
Lido Corp. has a commissary that supplies food and other products to its franchisees. It has two service departments, computer services (SI) and administration and maintenance (S2), which support two operating departments, food products (P1) and supplies (P2). As internal auditor, you are checking the procedures for cost allocation and find the following results: Cost allocated to P1 P30,000 from S1 ? from S2 Cost allocated to P2 P37,500 from S2 ? from S1 P150,000 Total costs for the two service departments S2's service is provided as follows: 20 percent to S1 50 percent to P1 30 percent to P2 The direct method of allocating is used.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Determine the total service department costs incurred by S2
Transcribed Image Text:Lido Corp. has a commissary that supplies food and other products to its franchisees. It has two service
departments, computer services (SI) and administration and maintenance (S2), which support two operating
departments, food products (P1) and supplies (P2). As internal auditor, you are checking the procedures for cost
allocation and find the following results:
Cost allocated to P1
P30,000 from S1
? from S2
Cost allocated to P2
P37,500 from S2
? from S1
Total costs for the two service departments
S2's service is provided as follows:
20 percent to S1
50 percent to P1
30 percent to P2
P150,000
The direct method of allocating is used.
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