Allocation of service department costs: Alaska LTD has two production departments (P1 and P2) and two service/support departments (S1 and S2). Data regarding the original costs of all departments and the percentages of using supporting departments' services is presented in the following attached table:

Required: Please use the above information to answer questions.

How much of the second service department's cost will be assigned to the second production department using the reciprocal method?

Using the reciprocal method, how much is the total cost of the first production department after allocating all service departments' costs?

Using the reciprocal method, how much is the total cost of the second production department after allocating all service departments' costs?

 

Transcribed Image Text:

costs S1 S2 support depts S2 $419,729 S1 $201,085 0% 17% 21% 0% operating depts P2 $806,756 P1 $621,949 51% 23% 28% 60% Total $2,049,519 100% 100% costs S1 S2 support depts S2 $419,729 S1 $201,085 0% 17% 21% 0% operating depts P2 $806,756 P1 $621,949 51% 23% 28% 60% Total $2,049,519 100% 100%

Answer rating: 100% (QA)

For all questions answers in table Particulars Cost Allocation of S1 Total Allocation of S2 Total A... View the full answer