What is the amount of maintenance and utilities department costs distributed to producing departments A and B for June using direct method, (2) the step method (maintenance department first), and (3) the reciprocal method? (Do not round intermediate
What is the amount of maintenance and utilities department costs distributed to producing departments A and B for June using direct method, (2) the step method (maintenance department first), and (3) the reciprocal method? (Do not round intermediate
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:
Overhead costs incurred
Service provided to departments
Maintenance
Utilities
Producing-A
Producing-B
Service Departments
Maintenance Utilities
$ 405,000 $ 681,000
1. The direct method
2. The step method
3. The reciprocal method
10%
20
70
100%
Producing
Department A
Totals
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? (Do not round intermediate
calculations. Round final answers to the nearest dollar.)
Producing
Department B
5%
40
55
100%
$
$
$
Total Service
Department Cost
0
0
0
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VIEWStep 3: Allocate service department overhead costs to producing departments by step method
VIEWStep 4: Allocate service department overhead costs to producing departments by reciprocal method
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