Reference no: EM132782722
The XYZ Company has 4 departments in its factory consisting of two service departments; S1 and S2, and two production departments; P1 and P2. Each of the production departments produce a single product. The current costs of each department are:
S1$14,000
S2 $34,000
P1 $20,000
P2 $33,000
The distribution and consumption of departments' services is given in the following table:
|
|
Service provided to:
|
|
|
Si
|
52
|
P1
|
P2
|
|
Services provided by:
|
|
|
|
|
|
Si
|
-
|
20%
|
50%
|
30%
|
|
S2
|
10%
|
-
|
45%
|
45%
|
Question 1) What is the total cost incurred by Department P1 after the allocation of the service department costs on the basis of the Direct method?
Question 2) What is the total cost incurred by Department P2 after the allocation of the service department costs on the basis of the Direct method?
Question 3) What is the total cost incurred by Department P1 after the allocation of the service department costs on the basis of the step-down method?
Question 4) What is the total cost incurred by Department P2 after the allocation of the service department costs on the basis of the step-down method