A company has two service departments (S1 and S2) and two production departments (P1 and P2). Departmental data for January were as follows:

Financial & Managerial Accounting
13th Edition
ISBN:9781285866307
Author:Carl Warren, James M. Reeve, Jonathan Duchac
Publisher:Carl Warren, James M. Reeve, Jonathan Duchac
Chapter27: Lean Principles, Lean Accounting, And Activity Analysis
Section: Chapter Questions
Problem 27.22EX
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A company has two service departments (S1 and S2) and two production departments (P1 and P2). Departmental data for January were as follows:

S2
$1
P27,000
P18,000
Costs incurred:
Service provided to:
S1
20%
S2
10%
P1
50%
30%
P2
40%
50%
What are the total allocated service department costs to P2 if the company uses the reciprocal method of
allocating its service department costs? (Round calculations to the nearest whole number).
Transcribed Image Text:S2 $1 P27,000 P18,000 Costs incurred: Service provided to: S1 20% S2 10% P1 50% 30% P2 40% 50% What are the total allocated service department costs to P2 if the company uses the reciprocal method of allocating its service department costs? (Round calculations to the nearest whole number).
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