Interdepartment Services: Direct Method Tucson Manufacturing Company has five op
ID: 2478173 • Letter: I
Question
Interdepartment Services: Direct Method Tucson Manufacturing Company has five operating departments, two of which are producing departments (P1 and P2) and three of which are service departments (S1, S2, and S3). All costs of the service departments are allocated to the producing departments. The following table shows the distribution of services from the service departments. Services provided to Services provided from S1 S2 S3 P1 P2 S1 -- 5% 25% 50% 20% S2 10% -- 5 45 40 S3 15 5 -- 20 60 The direct operating costs of the service departments are as follows: S1 $63,000 S2 255,000 S3 21,000 Using the direct method, prepare a schedule allocating the service department costs to the producing departments.
Explanation / Answer
Based on Direct Method Allocation Method
Department P1 P2 S1 50/70 20/70 S2 45/85 40/85 S3 20/80 60/80Related Questions
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