Integrity Company is exploring ways to allocate the cost of service departments such as Quality Control...

Transcribed Image Text:

Integrity Company is exploring ways to allocate the cost of service departments such as Quality Control and Maintenance to the production departments such as Machining and Assembly. The controller of the company has provided the following information: Quality Maintenance Machining Assembly Total Control Budgeted OH before allocation P200,000 P350,000 P400,000 P300,000 P1,250,000 Budgeted machine hours 50,000 50,000 Budgeted DLH 25,000 25,000 Budgeted hours of service quality control 7,000 21,000 7,000 35,000 Budgeted service hours of maintenance 10,000 18,000 12,000 40,000 A. Under direct method of allocating service department costs, what is the total service cost allocated to the machining and assembly departments, respectively? [Ans: P382,500 and P167,500] B. Under the step method of allocating service cost department costs, what is the total maintenance costs allocated to the machining and assembly departments, respectively? [Ans: P162,000 and P108,000] Integrity Company is exploring ways to allocate the cost of service departments such as Quality Control and Maintenance to the production departments such as Machining and Assembly. The controller of the company has provided the following information: Quality Maintenance Machining Assembly Total Control Budgeted OH before allocation P200,000 P350,000 P400,000 P300,000 P1,250,000 Budgeted machine hours 50,000 50,000 Budgeted DLH 25,000 25,000 Budgeted hours of service quality control 7,000 21,000 7,000 35,000 Budgeted service hours of maintenance 10,000 18,000 12,000 40,000 A. Under direct method of allocating service department costs, what is the total service cost allocated to the machining and assembly departments, respectively? [Ans: P382,500 and P167,500] B. Under the step method of allocating service cost department costs, what is the total maintenance costs allocated to the machining and assembly departments, respectively? [Ans: P162,000 and P108,000]

Answer rating: 100% (QA)

Answer A Under the direct method of allocating service department costs the total service cost alloc... View the full answer