Required information Skip to question [The following information applies to the questions displayed below.] The following information is departmental cost allocation with two service departments and two production departments. Percentage Service Provided to Department Cost S1 S2 P1 P2 Service 1 (S1) $ 47,000 0 % 20 % 40 % 40 % Service 2 (S2) 37,000 20 0 20 60 Production 1 (P1) 270,000 Production 2 (P2) 320,000 What is the total cost in P1 and P2 after allocation using the direct method?
Required information Skip to question [The following information applies to the questions displayed below.] The following information is departmental cost allocation with two service departments and two production departments. Percentage Service Provided to Department Cost S1 S2 P1 P2 Service 1 (S1) $ 47,000 0 % 20 % 40 % 40 % Service 2 (S2) 37,000 20 0 20 60 Production 1 (P1) 270,000 Production 2 (P2) 320,000 What is the total cost in P1 and P2 after allocation using the direct method?
Financial And Managerial Accounting
15th Edition
ISBN:9781337902663
Author:WARREN, Carl S.
Publisher:WARREN, Carl S.
Chapter27: Lean Manufacturing And Activity Analysis
Section: Chapter Questions
Problem 16E: Cost of quality report A. Using the information in Exercise 15, identify the cost of quality...
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The following information is departmental cost allocation with two service departments and two production departments.
|
Percentage Service Provided to |
|||||||||||||||
| Department | Cost | S1 | S2 | P1 | P2 | ||||||||||
| Service 1 (S1) | $ | 47,000 | 0 | % | 20 | % | 40 | % | 40 | % | |||||
| Service 2 (S2) | 37,000 | 20 | 0 | 20 | 60 | ||||||||||
| Production 1 (P1) | 270,000 | ||||||||||||||
| Production 2 (P2) | 320,000 | ||||||||||||||
What is the total cost in P1 and P2 after allocation using the direct method?
Expert Solution
Step 1
This question deals with the direct method of cost allocation.
In direct method, service department cost is allocated to production department.
Service department service to other department is not considered in this method.
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