221_Solutions_Chap_7_2nd_set_Fa_05

221_Solutions_Chap_7_2nd_set_Fa_05 - E7-21 Producing Service

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Unformatted text preview: E7-21 Producing Service DepartmentsDepartmentsS1S2S3P1P2Service dept. costs $ 42,000 $ 85,000 $ 19,000 S1 allocations: (42,000) $42,000 (50/70) $30,000 $42,000 (20/70) $12,000 S2 allocations: (85,000) $85,000 (45/85) 45,000 $85,000 (40/85) 40,000 S3 allocations: (19,000) $19,000 (20/80) 4,750 $19,000 (60/80) ______ ______ ______ ______ 14,250Total costs $ $ $ $79,750$66,250Note that the direct method gives no recognition to interdepartmental services, which are potentially significant in this exercise. Instructors assigning this exercise might also assign E7-22 or solve it in class. E7-22 The service department costs are allocated in the following order: 1st: S1 (provided 30% of its services to other service departments); 2nd: S3 (provided 20% of its services to other service departments); 3rd: S2 (provided 15% of its services to other service departments). Producing Service DepartmentsDepartmentsS1S3S2P1P2Service dept. costs $ 42,000 $ 19,000 $ 85,000 S1 allocations: (42,000) $42,000 (25/100) 10,500 $42,000 (5/100) 2,100 $42,000 (50/100) $21,000 $42,000 (20/100) $ 8,400 S3 allocations: (29,500) $29,500 (5/85) 1,735 $29,500 (20/85) 6,941 $29,500 (60/85) 20,824 S2 allocations: (88,835) $83,835 (45/85) 47,030 $83,835 (40/85) ______...
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This homework help was uploaded on 02/19/2008 for the course H ADM 221 taught by Professor Gpotter during the Spring '05 term at Cornell University (Engineering School).

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221_Solutions_Chap_7_2nd_set_Fa_05 - E7-21 Producing Service

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