Robinson Products Company has two service departments (S1 and S2) and two produc

Question

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

To

Determine the total cost of P1 and P2 using the reciprocal method. (Round your intermediate calculations to the nearest whole dollar and final answers to 2 decimal places.)

                                                   Total Cost Allocated

Product Department 1                      ------------------

Product Department 2               --------------------------

  From

To

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

Explanation / Answer

Cost of S1           30% to P1           50% P2               20%S2

cost of S2            40% to p1           40%to p2              20%s1

orginal cost of service department

s1= 235,000

s2 = 77,000

After share from distribution of service department

s1 = 235,000 + 20% s2

S2 = 77,000 + 20% S1

putting the value of S2 in equation (1)

S1 = 235,000 + 20% (77,000 +20% of S1)

S1 = 235,000 +15,400 +.04S1

S1 = 260,833

By putting the value of S1 in equation (2)

S2 = 77,000 +20% of s1

s2 = 77,000 + 20% of 260,833

S2 = $129,167

Distribution summary

p1 p2 s1 s2 original cost 64,000 190,000 235,000 77,000 Distribution 78,250 130,416 (260,833) 52,167 s2 51,557 51,667 25,833 (129,167) total 193,917 372,083 --------- 0----

Related Questions

Navigate

• Browse (All)
• Browse R
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.