10.42 - 10.42 (60 min) Cost allocation; step method with...

Info iconThis preview shows pages 1–2. Sign up to view the full content.

View Full Document Right Arrow Icon
10.42 (60 min) Cost allocation; step method with analysis and decision making a. Cost allocation using the step method Services from: Natural Gas (S1) Electricity Generatio n (S2) General Administrat ion (S3) Fertiliz er P1 Additiv es P2 Natural Gas - 0. 40 - 0.10 0.50 Electricity Generation 0.10 - 0.15 0.45 0.30 General Administration 0.10 0. 15 - 0.40 0.35 Departmental Costs $70,00 0 $ 110,000 $ 48,000 $600,0 00 $440,0 00 Although the problem requires only allocations to S2, here is the complete allocation. Allocation of service costs Natural Gas S1 Electricity Generatio n S2 General Administrat ion S3 Fertiliz er P1 Additiv es P2 Total Natural gas base - 0. 40 - 0.10 0.50 1.00 Proportion of Natural gas base 0.40 - 0.10 0.50 1.00 Allocation of Natural gas cost $(70,0 00) $ 28,000 $ - $ 7,000 $ 35,000 $ - Amount of electricity generation base - - 0.15 0.45 0.30 0.90 Proportion of Electricity generation base - - 0. 1667
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Image of page 2
This is the end of the preview. Sign up to access the rest of the document.

This note was uploaded on 11/25/2010 for the course ACCT 33010 taught by Professor Staff during the Spring '08 term at Kent State.

Page1 / 3

10.42 - 10.42 (60 min) Cost allocation; step method with...

This preview shows document pages 1 - 2. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online