FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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Robinson Products Company has two service departments (S1 and S2) and two production departments (P1 and P2). The
distribution of each service department's efforts (in percentages) to the other departments is:
From To
S1 S2 P1 P2
S1 - 20% 30% ?%
S2 20% - ? 40
The direct operating costs of the departments (including both variable and fixed costs) are:
S1 $ 265,000
S2 83,000
P1 70,000
P2 220,000
Required:
1. Determine the total cost of P1 and P2 using the direct method.
2. Determine the total cost of P1 and P2 using the step method.
3. Determine the total cost of P1 and P2 using the reciprocal method.
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Transcribed Image Text:Robinson Products Company has two service departments (S1 and S2) and two production departments (P1 and P2). The distribution of each service department's efforts (in percentages) to the other departments is: From To S1 S2 P1 P2 S1 - 20% 30% ?% S2 20% - ? 40 The direct operating costs of the departments (including both variable and fixed costs) are: S1 $ 265,000 S2 83,000 P1 70,000 P2 220,000 Required: 1. Determine the total cost of P1 and P2 using the direct method. 2. Determine the total cost of P1 and P2 using the step method. 3. Determine the total cost of P1 and P2 using the reciprocal method.
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