QUESTION 37Cost AccountingChoose the answer from the choices The managers of GB Inc. are discussing ways to allocate the cost-of-service departments suchas: Quality Control and Maintenance to the production departments. To aid them in thisdiscussion, the controller has provided the following information (SEE PICTURE BELOW):If GB uses the reciprocal method of allocating service costs, the total amount of quality controlcosts (rounded to the nearest amount) to be allocated to the other departments would be: *BudgetedMaintenance Machining AssemblyTotalQualityControlOverheadcosts beforeallocationMachineP 350,000 P 200,000P 400,000 P 300,000P 1,250,000hours50,00050,000Direct laborhoursHrs.25,00025,000ofservices:Quality7,0007,00012,00035,00040,000control21,000Maintenance 10,00018,000O P 284,211O P 336,842O P 350,000O P 421,053

Working : The reciprocal method requires the usage of two formulas that are supported the entire…

as: Quality Control and Maintenance to the production departments. To aid them in this discussion, the controller has provided the following information (SEE PICTURE BELOW): If GB uses the reciprocal method of allocating service costs, the total amount of quality co costs (rounded to the nearest amount) to be allocated to the other departments would be

as: Quality Control and Maintenance to the production departments. To aid them in this discussion, the controller has provided the following information (SEE PICTURE BELOW): If GB uses the reciprocal method of allocating service costs, the total amount of quality co costs (rounded to the nearest amount) to be allocated to the other departments would be

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter14: Quality And Environmental Cost Management

Section: Chapter Questions

Problem 11E: Abernathy, Inc., produces two different generators and is concerned about their quality. The company...

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