Solexx Corporation allocates its service department overhead costs to producing departments. This information is for the month of June: Service Departments Maintenance $270,000 Utilities $ 648,000 Overhead costs incurred Service provided to departments Maintenance 5% Utilities 10% Producing-A Producing-B 20 40 70 55 Totals 100% 100% Required: What is the amount of maintenance and utilities department costs distributed to producing departments A and B for June using (1) the direct method, (2) the step method (maintenance department first), and (3) the reciprocal method? (Round percentage calculations to 4 decimal places (e.g., 33.3333%), do not round intermediate calculations and round your final answers to the nearest dollar amount.) Total Producing Producing Department A Producing Department B Department Cost 1. The direct method 2. The step method 3. The reciprocal method
Solexx Corporation allocates its service department overhead costs to producing departments. This information is for the month of June: Service Departments Maintenance $270,000 Utilities $ 648,000 Overhead costs incurred Service provided to departments Maintenance 5% Utilities 10% Producing-A Producing-B 20 40 70 55 Totals 100% 100% Required: What is the amount of maintenance and utilities department costs distributed to producing departments A and B for June using (1) the direct method, (2) the step method (maintenance department first), and (3) the reciprocal method? (Round percentage calculations to 4 decimal places (e.g., 33.3333%), do not round intermediate calculations and round your final answers to the nearest dollar amount.) Total Producing Producing Department A Producing Department B Department Cost 1. The direct method 2. The step method 3. The reciprocal method
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Solexx Corporation allocates its service department overhead costs to producing departments. This information is for the
month of June:
Service Departments
Utilities
$ 648,000
Maintenance
Overhead costs incurred
$270,000
Service provided to departments
Maintenance
5%
Utilities
10%
Producing-A
Producing-B
20
40
70
55
Totals
100%
100%
Required:
What is the amount of maintenance and utilities department costs distributed to producing departments A and B for June
using (1) the direct method, (2) the step method (maintenance department first), and (3) the reciprocal method? (Round
percentage calculations to 4 decimal places (e.g., 33.3333%), do not round intermediate calculations and round your
final answers to the nearest dollar amount.)
Producing
Department A
Producing
Department B
Total Producing
Department
Cost
1. The direct method
2. The step method
3. The reciprocal method
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