Robinson Products Company has two service departments (S1 and S2) and two production departments (P1 and P2). The distribution of each service department's efforts (In percentages) to the other departments is: From $1 S2 S1 S2 S1 P1 P2 20% 52 20% $ 250,000 80,000 67,000 205,000 To The direct operating costs of the departments (including both variable and fixed costs) are: P1 • P2 30% ? ?% 48 Production department 1 Production department 2 Required: 1. Determine the total cost of P1 and P2 using the direct method. 2. Determine the total cost of P1 and P2 using the step method. 3. Determine the total cost of P1 and P2 using the reciprocal method. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Determine the total cost of P1 and P2 using the direct method. (Do not round intermediate calculations.) Total Cost Allocated

Robinson Products Company has two service departments (S1 and S2) and two production departments (P1 and P2). The distribution of each service department's efforts (In percentages) to the other departments is: From $1 S2 S1 S2 S1 P1 P2 20% 52 20% $ 250,000 80,000 67,000 205,000 To The direct operating costs of the departments (including both variable and fixed costs) are: P1 • P2 30% ? ?% 48 Production department 1 Production department 2 Required: 1. Determine the total cost of P1 and P2 using the direct method. 2. Determine the total cost of P1 and P2 using the step method. 3. Determine the total cost of P1 and P2 using the reciprocal method. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Determine the total cost of P1 and P2 using the direct method. (Do not round intermediate calculations.) Total Cost Allocated

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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Concept explainers

Overheads

In cost accounting, overhead refers to those expenses which occur during the operating of a business. Overhead includes the fixed, variable, or semi-variable which is not directly involved with a company product or service. It is very important to analyze overhead expense as it helps the company in determining how much a company must charge for its products and services so that they can generate profit. Overhead expenses depend upon the nature of the business operations.

Question

Robinson Products Company has two service departments (S1 and S2) and two production departments (P1 and P2). The distribution of
each service department's efforts (In percentages) to the other departments is:
From
51
52
S1
S1
S2
P1
P2
20%
$ 250,000
80,000
67,000
205,000
To
S2
20%
P1 • P2
30%
?
The direct operating costs of the departments (including both variable and fixed costs) are:
?%
48
Production department 1
Production department 2
Required:
1. Determine the total cost of P1 and P2 using the direct method.
2. Determine the total cost of P1 and P2 using the step method.
3. Determine the total cost of P1 and P2 using the reciprocal method.
Complete this question by entering your answers in the tabs below.
Required 1 Required 2
Determine the total cost of P1 and P2 using the direct method. (Do not round intermediate calculations.)
Total Cost
Allocated
Required 3

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