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In: Accounting

Robinson Products Company has two service departments (S1 and S2) and two production departments (P1 and...

Robinson Products Company has two service departments (S1 and S2) and two production departments (P1 and P2). The distribution of each service department’s efforts (in percentages) to the other departments is:

From

To

S1 S2 P1 P2
S1 20 % 30 % ? %
S2 20 % ? 40

The direct operating costs of the departments (including both variable and fixed costs) are:

S1 $ 250,000
S2 80,000
P1 67,000
P2 205,000

Required:

1. Determine the total cost of P1 and P2 using the direct method.

2. Determine the total cost of P1 and P2 using the step method.

3. Determine the total cost of P1 and P2 using the reciprocal method.

  • Required 1
  • Required 2
  • Required 3

Determine the total cost of P1 and P2 using the direct method. (Do not round intermediate calculations.)

Total Cost Allocated
Production department 1
Production department 2

Solutions

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