ordner 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: Proportion of Services Used by: Department Direct costs S1 S2 P1 P2 S1 $ 120,000 0.70 0.10 0.20 S2 $ 133,000 0.20 0.30 0.50 P1 $ 183,000 P2 $ 176,000 Under the step method of cost allocation, the amount of S2 costs allocated to S1 would be: Multiple Choice $55,200. $0. $26,600. $53,200.
ordner 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: Proportion of Services Used by: Department Direct costs S1 S2 P1 P2 S1 $ 120,000 0.70 0.10 0.20 S2 $ 133,000 0.20 0.30 0.50 P1 $ 183,000 P2 $ 176,000 Under the step method of cost allocation, the amount of S2 costs allocated to S1 would be: Multiple Choice $55,200. $0. $26,600. $53,200.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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TB MC Qu. 11-53 (Algo) Cordner Corporation has two production departments...
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:
| Proportion of Services Used by: | |||||||||||
| Department | Direct costs | S1 | S2 | P1 | P2 | ||||||
| S1 | $ | 120,000 | 0.70 | 0.10 | 0.20 | ||||||
| S2 | $ | 133,000 | 0.20 | 0.30 | 0.50 | ||||||
| P1 | $ | 183,000 | |||||||||
| P2 | $ | 176,000 | |||||||||
Under the step method of cost allocation, the amount of S2 costs allocated to S1 would be:
Multiple Choice
-
$55,200.
-
$0.
-
$26,600.
-
$53,200.
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