Ming Company has two service departments (S1 and S2) and two production departments (P1 and P2). Last year, directly identified overhead costs were $255,000 for S1 and $320,000 for S2.
Information on the consumption of their services follows:
| Supplying | User Departments | |||
|---|---|---|---|---|
| Departments | S1 | S2 | P1 | P2 |
| S1 | 500 | 1,200 | 6,000 | 1,300 |
| S2 | 800 | 200 | 7,000 | 9,000 |
(a) Determine the service department costs allocated to the two production departments using the direct method.
Note: Round each rate to two decimal places before calculating the allocated amounts. Round answers to the nearest dollar.
| Rate | Total | |||
|---|---|---|---|---|
| (rounded to 2 decimals) | Total P1 | Total P2 | (any diff due to rounding) | |
| S1 allocation amount | ||||
| S1 allocation amount | ||||
| Total service department costs |
(b) Determine the service department costs allocated to the two production departments using the sequential method beginning with the allocation of S1 department costs.
Note: Round each rate to two decimal places before calculating the allocated amounts. Round answers to the nearest dollar.
| Total allocated service | |
|---|---|
| department costs | |
| P1 | |
| P2 | |
| Total (any diff due to rounding) |
(c) Determine the service department costs allocated to the two production departments using the reciprocal method.
Note: Do not round your computations; however, round your final answers to the nearest dollar.
| Total allocated service | |
|---|---|
| department costs | |
| P1 | |
| P2 | |
