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In: Accounting

A company produces a product in two departments, P1 and P2. The company has two support...

A company produces a product in two departments, P1 and P2. The company has two support departments, S1 and S2. The company allocates S1 costs to other departments based on square meters and S2 costs based on machine hours.

SUPPORT DEPARTMENTS PRODUCTION DEPARTMENTS

S1 S2 P1 P2 TOTAL

COSTS    500 120 350 150 1,120

SQUARE METERS 1000 1600 2400 4000 9000

MACHINE HOURS 200 375 1600 200 2375

TOTAL COSTS 500 120 350 150 1,120

a) (20 pts) Use the direct method to allocate support department costs. b) (40 pts) Use the sequential method to allocate support department costs. c) (40 pts) Use the reciprocal method to allocate support department costs.

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Expert Solution

ekkarill92 answered 2 years ago
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