Can you explain in step by step detail with your work clearly labeled on how to

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Can you explain in step by step detail with your work clearly labeled on how to get the answer for number 2. I don't understand the work process at all.

ACG 311, Spring 2018. Some practice problems for Exam 2 From Chapter 7 The next two questions are based on the following: Oaks Company has two support departments, Maintenance Department (MD) and Personnel Department (PD), and two producing departments, Pl and P2. The Maintenance Department costs of $30,000 are allocated on the basis of standard service hours used. The Personnel Department costs of $4,500 are allocated on the basis of number of employees. The direct costs of Departments PI and P2 are $9,000 and S15,000, respectively. Data on standard service hours and number of employees are as follows: Standard service hours used 100 50 300150 Number of employees Direct labor hours 10 120 90 90 50 50 250 250 1. Using the direct method, what is the cost of the Maintenance Department allocated to Department P1? (Ans: $20,000) 2. Using the sequential method, if the support department with the highest percentage of interdepartmental service is allocated first, what is the cost of the support departments allocated to Department PI? (Ans: $21,750)

Explanation / Answer

Req 1: OH allocation Summary Using Direct Method MD PD P1 P2 OH of Support department 30000 4500 Add: Maintenance OH -30000 20000 10000 (in P1 and P2 in Std service hrs i.e. 300:150) Add: Personnel departmentt Oh -4500 2250 2250 (In P1 and P2 in Employees i.e. 90:90) Total OH allocated 0 0 22250 12250 OH of maintenance deptt allocated to P1: $ 20,000 Req 2: OH allocation Summary Using Sequential Method MD PD P1 P2 OH of Support department 30000 4500 Add: Maintenance OH -30000 3000 18000 9000 (in PD P1 and P2 in Std service hrs i.e. 50:300:150) Total OH allocated 0 7500 18000 9000 Add: Personnel departmentt Oh -7500 3750 3750 (In P1 and P2 in Employees i.e. 90:90) Total OH allocated 0 0 21750 12750 OH of Support deptt allocated to P1: $ 21,750

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