FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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Dolphin Company has two service departments, S1 and S2 and three production departments, P1, P2 and P3. The following data relate to Dolphin Company's allocation of service department costs:
Number of Employees
S1
S2
IP1
P2
P3
O $13,333
The allocation of costs from S2 to S1 would be:
O $4,800
Cost
O $0
80,000
40,000
100,000
800,000
1,200,000
O $10,000
S1 allocates its costs on the basis of number of employees. S2 allocates its costs on the basis of kilowatt hours. The order of allocation for Dolphin Company is S1 first and S2 second. Dolphin
Company uses the direct method to allocate its service department costs.
Problem 3-4
2
3
3
6
6
Kilowatt Hours
600
400
500
1,000
2,500
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Transcribed Image Text:Dolphin Company has two service departments, S1 and S2 and three production departments, P1, P2 and P3. The following data relate to Dolphin Company's allocation of service department costs: Number of Employees S1 S2 IP1 P2 P3 O $13,333 The allocation of costs from S2 to S1 would be: O $4,800 Cost O $0 80,000 40,000 100,000 800,000 1,200,000 O $10,000 S1 allocates its costs on the basis of number of employees. S2 allocates its costs on the basis of kilowatt hours. The order of allocation for Dolphin Company is S1 first and S2 second. Dolphin Company uses the direct method to allocate its service department costs. Problem 3-4 2 3 3 6 6 Kilowatt Hours 600 400 500 1,000 2,500
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