The following information is departmental cost allocation with two service departments and two production departments. Department Cost Percentage Service Provided to S1 S2 P1 P2 Service 1 (S1) $ 46,000 0% 20% 40% 40% Service 2 (S2) 36,000 25 0 30 45 Production 1 (P1) 260,000 Production 2 (P2) 310,000 a. What is the amount of service department cost allocated to P1 and P2 using the direct method? b. What is the total cost in P1 and P2 after allocation using the direct method? c. What is the total cost in P1 and P2 and what is the amount of service department cost allocated to P1 and P2 using the step method with S1 going first? d. What is the amount of service department cost allocated to P1 and P2 using the direct method if the cost in P1 is changed from $260,000 to $280,000?
The following information is departmental cost allocation with two service departments and two production departments. Department Cost Percentage Service Provided to S1 S2 P1 P2 Service 1 (S1) $ 46,000 0% 20% 40% 40% Service 2 (S2) 36,000 25 0 30 45 Production 1 (P1) 260,000 Production 2 (P2) 310,000 a. What is the amount of service department cost allocated to P1 and P2 using the direct method? b. What is the total cost in P1 and P2 after allocation using the direct method? c. What is the total cost in P1 and P2 and what is the amount of service department cost allocated to P1 and P2 using the step method with S1 going first? d. What is the amount of service department cost allocated to P1 and P2 using the direct method if the cost in P1 is changed from $260,000 to $280,000?
Cornerstones of Cost Management (Cornerstones Series)
4th Edition
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Don R. Hansen, Maryanne M. Mowen
Chapter7: Allocating Costs Of Support Departments And Joint Products
Section: Chapter Questions
Problem 30E: A company uses charging rates to allocate service department costs to the using departments. The...
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1. The following information is departmental cost allocation with two service departments and two production departments.
Department | Cost |
Percentage Service Provided to |
|||
---|---|---|---|---|---|
S1 | S2 | P1 | P2 | ||
Service 1 (S1) | $ 46,000 | 0% | 20% | 40% | 40% |
Service 2 (S2) | 36,000 | 25 | 0 | 30 | 45 |
Production 1 (P1) | 260,000 | ||||
Production 2 (P2) | 310,000 |
a. What is the amount of service department cost allocated to P1 and P2 using the direct method?
b. What is the total cost in P1 and P2 after allocation using the direct method?
c. What is the total cost in P1 and P2 and what is the amount of service department cost allocated to P1 and P2 using the step method with S1 going first?
d. What is the amount of service department cost allocated to P1 and P2 using the direct method if the cost in P1 is changed from $260,000 to $280,000?
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