Jing's BMX Incorporated has two service departments and three producing departments. Data for 2018 are as...

 

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Jing's BMX Incorporated has two service departments and three producing departments. Data for 2018 are as follows: Service Departments Maintenance Storeroom Producing Departments Machinery Assembly Packaging Additional Information: Departments Maintenance Storeroom Machinery Assembly Packaging Total Total Cost P250,000 180,000 600,000 892,000 436,000 Number of Requisitions 400 Services Provided by Maintenance 14% - 32% 3,500 26% 6,000 28% 4,100 100% 14,000 The costs of the Maintenance Department are allocated on the basis of percent of services rendered while the costs of the Storeroom Department are allocated on the basis of the number of requisitions. Required: Distribute the service departments' costs to the producing departments and compute overhead rates based on direct labor hours: 20,000 for Machinery; 36,000 for Assembly; and 18,000 for Packaging using the following methods: (a) Direct Method (b) Step Method (Maintenance Department costs are allocated first). (c) Reciprocal Method (Algebraic Method). Jing's BMX Incorporated has two service departments and three producing departments. Data for 2018 are as follows: Service Departments Maintenance Storeroom Producing Departments Machinery Assembly Packaging Additional Information: Departments Maintenance Storeroom Machinery Assembly Packaging Total Total Cost P250,000 180,000 600,000 892,000 436,000 Number of Requisitions 400 Services Provided by Maintenance 14% - 32% 3,500 26% 6,000 28% 4,100 100% 14,000 The costs of the Maintenance Department are allocated on the basis of percent of services rendered while the costs of the Storeroom Department are allocated on the basis of the number of requisitions. Required: Distribute the service departments' costs to the producing departments and compute overhead rates based on direct labor hours: 20,000 for Machinery; 36,000 for Assembly; and 18,000 for Packaging using the following methods: (a) Direct Method (b) Step Method (Maintenance Department costs are allocated first). (c) Reciprocal Method (Algebraic Method).

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a Direct Method Under the direct method service department costs are allocated directly to producing ... View the full answer