Instruments like checks can’t be used as collateral Instruments like checks can’

Question

Instruments like checks can’t be used as collateral Instruments like checks can’t be used as collateral 10,000 112.55,00D 6. Moccasin Corp. two services by the support departments is as follows: has two support departments, A and B and two producing departments, Pl and P2. The distribution of Services Provided to Services Provided from Pl 45% 30% P2 35% 50% 20% 20% Total department costs for the support and producing departments are as follows: $90,000 150,000 850,000 700,000 PI P2 Required Find the amount of total costs for PI and P2 using the reciprocal method.

Explanation / Answer

Statement Showing the total amount of cost for P1 and P2

Particulars. A. B. P1. P2

1. Total Cost. 90000. 150000. 850000. 700000  

2. Apportionment

Of Dept A Cost

At the given rate (90000) 18000. 40500. 31500.

3. Apportionment

Of Dept B cost 33600. (168000). 50400 84000.

4. Reapportionment

Of Dept A Cost. (33600). 6720. 15120. 11760

5. Reapportionment

Of Dept B cost 1344. (6720). 2016. 3360.

6. Dept A Cost. (1344). 269. 605. 470.

7. Dept B cost. 54. (269). 81. 134.

8. Dept A Cost. (54). Nil. 30. 24.

9. Total Cost. Nil. Nil. 958752. 831248.

Notes : 1. Decimals had been ignored in point 6,7,8, and numbers had been approximate to the nearest multiply of $1.

2. At point 8, reapportionment of Dept A Cost to Dept B is taken as Nil, as it is not so material.

3. At point 8, reapportionment is done through 54/8*4.5 for P1 and 54/8*3.5 for P2 respectively

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