Villanueva Company has twoproducing and two servicedepartments labeled P1, P2, S1and S2, respectively. Directcosts for each departmentand the proportion of servicecosts used by the variousdepartments are as follows:(P1, P300,000): (P2,P200,000); (S1, P100,000; S2-25%, P1-50%, P2-25%); (S2,P40,000; S1-10%, P1-50%, P2-40%). What is the total cost ofP1 if the costs of servicedepartments are allocatedusing the algebraic method?P300,000P386,111P377,778O P370,000P388,889

Particular S1 S2 P1 P2 Department Cost 100,000 40,000 300,000 200,000 S1 -106,667 26,667 53,333…

Villanueva Company has two producing and two service departments labeled P1, P2, S1 and S2, respectively. Direct costs for each department and the proportion of service costs used by the various departments are as follows:

Villanueva Company has two producing and two service departments labeled P1, P2, S1 and S2, respectively. Direct costs for each department and the proportion of service costs used by the various departments are as follows:

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter7: Allocating Costs Of Support Departments And Joint Products

Section: Chapter Questions

Problem 30E: A company uses charging rates to allocate service department costs to the using departments. The...

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