Question

In: Accounting

Frank’s Foods has a warehouse that supplies products to its store locations. The warehouse has two...

Frank’s Foods has a warehouse that supplies products to its store locations. The warehouse has two service departments, Information Services (S1) and Operation Support (S2), and two operating departments, Order Processing (P1) and Delivery (P2). As an internal auditor, you are checking the company’s procedures for cost allocation. You find the following cost allocation results for September:
  

Costs allocated to P1 $ 41,000 from S1
? from S2
Costs allocated to P2 ? from S1
$ 26,700 from S2

Total costs for the two service departments are $112,200.

Operation Support's services are provided as follows:

  • 50 percent to Order Processing.
  • 30 percent to Delivery.

The direct method of allocating costs is used.

Required:

a. What are the total service department costs (S1 + S2) allocated to P2? (Do not round intermediate calculations.)

Total Allocated to P2 :

b. Complete the following: (Do not round intermediate calculations.)

From Information Services:

to Order Processing: $41,000

to Delivery: ?

From Operation Support:

To order processing: ?

To Delivery: $26,700

c. What proportion of S1's costs were allocated to P1 and P2?

Allocation of S1 costs%

P1%: ?

P2%: ?

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Expert Solution

ekkarill92 answered 1 year ago
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