The following information is departmental cost allocation with two service depar
ID: 2574403 • Letter: T
Question
The following information is departmental cost allocation with two service departments and two production departments.
Percentage Service Provided to
What is the amount of service department cost allocated to P1 and P2 using the direct method?
What is the total cost in P1 and in P2 after allocation using the direct method?
What is the amount of service department cost allocated to P1 and P2 using the step method with S1 going first?
The following information is departmental cost allocation with two service departments and two production departments.
Explanation / Answer
service department cost allocated to P1 and P2 ( Direct method)
Total cost in P1 and in P2 after allocation
Amount of service department cost allocated to P1 and P2 ( Step method)
P1 = 26900 and P2 = 59100 are the final answers
In column - 3 we start with - 48000 for S1 and allocate it to S2, P1 and P2 in the ratio of 25:30:45 ( values in same coulmn)
In column - 4 ( named as S2) we have 38000 + 12000 = 50000 cost for S2. we start this 4th column with - 50000 and allocate it to P1 and P2 in the ratio of 20:60
In column - 5 we have totals for P1 and P2 being the service department OH allocated to them.
Calculation P1 P2 S1 48000 * 30/75 & 48000 * 45/75 19200 28800 S2 38000*20/80 & 38000 * 60/80 9500 28500 28700 57300Related Questions
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