Reference no: EM132653728

The estimated departmental factory overhead for producing department X and Y and the estimated costs of service departments M, N, and O (before any service department allocations)are:

           Producing Department        Service Department

X.........$60,000 M................... $20,000

Y......... 90,000 N.....................20,000

O....................10,000

The interdependence of the departments is as follows:

Service Provided by

Department                                                    M             N                 O

Producing----X..................................... --           30%        40%

Producing----Y.....................................   50%        40            30

Service ---M........................................   --            20          --

Service ---N........................................   20            --             --

Service ---O........................................   30             10            --

Store 1 .....................................                --       --                20

Store 2 .....................................                --         --              10

Total                                                        100%      100%         100%

Required:

Question 1- Compute the final amount of estimated overhead of each service department after reciprocal transfer costs have been calculated algebraically.

Question 2- Compute the total factory overhead of each producing department and the amount of department G cost assigned to the Store 1 and to Store 2.