Please help with a and b. I understand how to do it using the reciprocal method

Question

Please help with a and b. I understand how to do it using the reciprocal method but I need help with the step sequencial method. Thank YOU!

Campaign Printing has two service departments, S1 and S2, and two production departments, P1 and P2. The data for May were as follows: Allocate service department costs (S1 & S2) to the production department (P1 & P2) using the step method with the sequence of allocation based on the highest percentage support concept. Compute the total amount of support costs allocated to each of the two production departments P1 & P2.

Explanation / Answer

Note 1:

Note 2:

For example, in the table above, 68.75% of $69600 (= $47850) is allocated to Assembly, not 55%.

Particulars S1 S2 P1 P2 Cost prior to allocation 96000 60000 360000 520000 Allocation of S1 costs -96000 9600 38400 48000 Note 1 Allocation of S2 -69600 47850    21750 Note 2 Total cost after allocation 0 0 446250 589750

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