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?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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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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