Lido Corp. has a commissary that supplies food and other products to its franchisees. It has two service departments, computer services (SI) and administration and maintenance (S2), which support two operating departments, food products (P1) and supplies (P2). As internal auditor, you are checking the procedures for cost allocation and find the following results: Cost allocated to P1 P30,000 from S1 ? from S2 Cost allocated to P2 P37,500 from S2 ? from S1 Total costs for the two service departments S2's service is provided as follows: 20 percent to S1 50 percent to P1 30 percent to P2 P150,000 The direct method of allocating is used.

Lido Corp. has a commissary that supplies food and other products to its franchisees. It has two service departments, computer services (SI) and administration and maintenance (S2), which support two operating departments, food products (P1) and supplies (P2). As internal auditor, you are checking the procedures for cost allocation and find the following results: Cost allocated to P1 P30,000 from S1 ? from S2 Cost allocated to P2 P37,500 from S2 ? from S1 Total costs for the two service departments S2's service is provided as follows: 20 percent to S1 50 percent to P1 30 percent to P2 P150,000 The direct method of allocating is used.

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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