252 JGG Company has two service departments and three producing departments each producing a separate product....

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252 JGG Company has two service departments and three producing departments each producing a separate product. For a number o years, the company has allocated the overhead costs of the service departments to the producing departments on the basis of annual sales pesos which lead serious inequities. The auditor recommended that maintenance and engineering service hours be used as a better service cost allocation basis. The following data was available: Maintenance hours Engineering hours Overhead costs Service Departments Maintenance Engineering 400 P54,000 400 P12,000 Producing Departments Dept. B Dept. A 200 400 Dept. C 200 400 800 800 P80,000 P90,000 PH Using the simultaneous equations (reciprocal method), what would be the total Engineering Department cost after allocation of interservice department costs, but before allocation to the Maintenance and Production Departments? Assume that the Engineering Department's total costs to be allocated is P60,000, how much of this costs is allocated to Department A, B and C under the reciprocal method. 2. Using the reciprocal method, what would be the total Maintenanc Department cost after allocation of interservice department costs but before allocation to the Engineering and Production Department If the Maintenance Department's total costs to be allocated is P24,000, what portion of the Maintenance Department's costs is allocated to Department A under the reciprocal method? Using the direct method of cost allocation, how much maintenance cost would be allocated to the Engineering Department? . Using the direct method of cost allocation, how much amount of maintenance costs would be allocated to Department C? 1. Under the step method of cost allocation, what amount of Maintenance Department's cost is allocated to Engineering Department? 252 JGG Company has two service departments and three producing departments each producing a separate product. For a number o years, the company has allocated the overhead costs of the service departments to the producing departments on the basis of annual sales pesos which lead serious inequities. The auditor recommended that maintenance and engineering service hours be used as a better service cost allocation basis. The following data was available: Maintenance hours Engineering hours Overhead costs Service Departments Maintenance Engineering 400 P54,000 400 P12,000 Producing Departments Dept. B Dept. A 200 400 Dept. C 200 400 800 800 P80,000 P90,000 PH Using the simultaneous equations (reciprocal method), what would be the total Engineering Department cost after allocation of interservice department costs, but before allocation to the Maintenance and Production Departments? Assume that the Engineering Department's total costs to be allocated is P60,000, how much of this costs is allocated to Department A, B and C under the reciprocal method. 2. Using the reciprocal method, what would be the total Maintenanc Department cost after allocation of interservice department costs but before allocation to the Engineering and Production Department If the Maintenance Department's total costs to be allocated is P24,000, what portion of the Maintenance Department's costs is allocated to Department A under the reciprocal method? Using the direct method of cost allocation, how much maintenance cost would be allocated to the Engineering Department? . Using the direct method of cost allocation, how much amount of maintenance costs would be allocated to Department C? 1. Under the step method of cost allocation, what amount of Maintenance Department's cost is allocated to Engineering Department?

Answer rating: 100% (QA)

To allocate the overhead costs of the service departments to the producing departments using the reciprocal method we need to follow these steps Step 1 Allocate the service department costs to the pro... View the full answer