Question 3:

(16 marks total)

Express Copy & Paste Photocopy Services has two service departments, S1 and S2, and two production

departments, P1 and P2. The data for March were as follows:

Dept. Costs

Provided to:

S1

S2

P1

S1

$90,000

10%

40%

S2

60,000

20%

55%

P1

360,000

P2

520,000

Required:

1)

Set up algebraic equations in linear equation form for the service and production departments.

(8 marks)

2)

Using the reciprocal method determine the reciprocated cost for each service department and

allocate the reciprocated costs of each service department to the production departments.

(8

marks)

P2

50%

25%