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Problem 18: Service Cost Allocation Irish Corporation distributes its service department overhead costs directly producing departments. Information for January, 2030 is presented below. Maintenance



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Problem 18: Service Cost Allocation Irish Corporation distributes its service department overhead costs directly producing departments. Information for January, 2030 is presented below. Maintenance Utilities FOH cost 93,500 45,000 Service Provided to Maintenance 10% Utilities 20% Mixing 40% 30% Assembly 40% 60% Required: Determined the amount of factory overhead cost of service departments allocated to producing departments using: a. Direct Method b. Step Method c. Reciprocal Method Problem 23: Service Cost Allocation Mark Corp has two service departments (Human Resources and Maintenan and two production departments (Machining and Assembly). The company allocates Maintenance cost on the basis of space occupied and Maintenance Department provides more service than Human Resources department. The space occupied by each department is as follows: Human Resource Maintenance Machining Assembly 14,000 22,000 50,000 60,000 If Human Resources costs amount is P200,000 and Maintenance is P500,000. Required: Compute the service cost allocated to each producing department using a. Direct method b. Step method

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