### Required Information**[The following information applies to the questions displayed below.]**Fifth Street Publishing (FSP) was founded many years ago as a printing cooperative offering printing services to members. Most members were charitable and religious organizations. Ten years ago, FSP became a for-profit corporation, although it retained its commitment to the original member groups. It has two production departments, Member and Commercial. The Member Department handles printing jobs for nonprofit groups and Commercial serves the remaining customers. FSP is organized this way to facilitate its billing: FSP charges nonprofit customers a price equal to the full cost of the job, including allocated overhead; commercial jobs are priced based on what the market will bear. FSP has two service departments, Accounting and Computer Services (CS). Accounting costs are allocated based on number of employees, and CS costs are allocated based on computer time (hours). Selected percentage use data follow:#### Use of Services Chart:| Supplying Department | Using Department | ||----------------------|----------------------------------------------------------|---------------------------------------------|| | Accounting Services | Member | Commercial || Accounting (employees) | 0% | 30% | 10% | 60% || Computer Services (hours) | 40% | 0% | 20% | 40% |- **Direct cost**: - Accounting: $9,000 - Computer Services: $38,000 - Member: $130,000 - Commercial: $350,000This data reflects how FSP allocates costs from its service departments to its production departments. **Allocation of Service Department Costs Using the Reciprocal Method**The controller has tasked the cost accountant with allocating the costs by employing the reciprocal method. We aim to determine how service department costs will be distributed among the production departments, with a specific requirement not to round intermediate calculations. Negative values should be presented with a minus sign.**Table Layout and Details:**The table is divided into two main sections: the columns represent departments and the rows capture the cost information. - **Columns:** - Accounting - Computer Service - Member Department - Commercial Department- **Rows:** - Service Department Costs - Before Allocation: The initial costs before any allocation are displayed. - Accounting: $9,000 - Computer Service: $38,000 - Member Department: $0 - Commercial Department: $0 - Accounting: Rows left blank for allocation entries. - Computer Service: Rows left blank for allocation entries. - Total: - Accounting: $9,000 - Computer Service: $38,000 - Member Department: $0 - Commercial Department: $0**Note:** The table requires the completion of allocations from the Accounting and Computer Service departments to the Member and Commercial Departments using the reciprocal method. Each cell intersection of departments needs calculated values, to be filled in while considering mutual services rendered between departments.

Overhead: It is the indirect cost incurred in addition to the direct costs for manufacture of products or for providing services. Reciprocal method allocation: Under this method, the simultaneous equation method is used to allocate the service department costs. Under this method, the costs of service departments are allocated to one another along with the production departments.e)

Business

Accounting

Required information [The following information applies to the questions displayed below.] Fifth Street Publishing (FSP) was founded many years ago as a printing cooperative offering printing services to members. Most members were charitable and religious organizations. Ten years ago, FSP became a for-profit corporation, although it retained its commitment to the original member groups. It has two production departments, Member and Commercial. The Member Department handles printing jobs for nonprofit groups and Commercial serves the remaining customers. FSP is organized this way to facilitate its billing: FSP charges nonprofit customers a price equal to the full cost of the job, including allocated overhead; commercial jobs are priced based on what the market will bear. FSP has two service departments, Accounting and Computer Services (CS). Accounting costs are allocated based on number of employees, and CS costs are allocated based on computer time (hours). Selected percentage use data follow: Using Department Computer Supplying Department Accounting (employees) Computer Services (hours) Accounting Services Member Commercial 08 30% 10% 60% 40% 08 20% 408 Direct cost $9,000 $38,000 $130,000 $350,000

Required information [The following information applies to the questions displayed below.] Fifth Street Publishing (FSP) was founded many years ago as a printing cooperative offering printing services to members. Most members were charitable and religious organizations. Ten years ago, FSP became a for-profit corporation, although it retained its commitment to the original member groups. It has two production departments, Member and Commercial. The Member Department handles printing jobs for nonprofit groups and Commercial serves the remaining customers. FSP is organized this way to facilitate its billing: FSP charges nonprofit customers a price equal to the full cost of the job, including allocated overhead; commercial jobs are priced based on what the market will bear. FSP has two service departments, Accounting and Computer Services (CS). Accounting costs are allocated based on number of employees, and CS costs are allocated based on computer time (hours). Selected percentage use data follow: Using Department Computer Supplying Department Accounting (employees) Computer Services (hours) Accounting Services Member Commercial 08 30% 10% 60% 40% 08 20% 408 Direct cost $9,000 $38,000 $130,000 $350,000

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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