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Unformatted text preview: . .: : : 27/06/2009 : : : Answer the following Questions: Question One: (7.5 Mark) Faculty of commerce has two service departments and two operating departments. Selected data on the four departments are presented below:- Service Depts. Operating Depts. Administration Computer services Accounting Finance Departmental costs before allocations $180,000 $90,000 $190,000 $900,000 Number of employees 15 5 20 80 Number of PCs 12 20 18 102 The Faculty of Commerce allocates service department costs by the step method in the following order : Administration ( number of employees) and Computer Services (number of personal computers PCs ). The Faculty makes no distinction between fixed and variable service department costs. Required : Using the Step Method , allocate the service department costs to the operating department. Question Two: (7.5 Mark) The Jerusalem Chemical Company produced three joint products at a joint cost of $117,000. These products were processed further and sold as follows. Chemical Product Sales Additional Processing Cost A $230,00 $190,000 B 330,000 300,000 C 175,000 100,000 The company has had an opportunity to sell at split off directly to other processors. If that alternative had been selected sales would have been A, $54,000; B, $28,000; and C, $54,000.The company expects to operate at the same level of production and sales in the forthcoming year. Consider all the available information, and assume that all costs incurred after split off are variable....
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