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: (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 of P1 if the costs of service departments are allocated using the direct method? * P386,111 P370,000 O P388,889 O P377,778 P386,666

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: (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 of P1 if the costs of service departments are allocated using the direct method? * P386,111 P370,000 O P388,889 O P377,778 P386,666

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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