managerial accounting 6 8 421347

Aug 29, 2021 | Uncategorized

Exercise E6 8 Allocation of Service Department Costs
Marvin Company has three service departments (S1, S2, and S3) and two production departments (P1 and P2). The following data relate to Marvin’s allocation of service department costs:
Budgeted Costs Nbr of Employees
S1 $4,000,000 80
S2 3,000,000 60
S3 2,000,000 30
P1 200
P2 300
Service department costs are allocated by the direct method. The number of employees is used as the allocation base for all service department costs.
Required:
a. Allocate service department costs to production departments.
Nbr of employees: Total Employees: % of Employees:
P1 Number Number Formula
P2 Number Number Formula
b. Calculate the total service department cost allocated to each production department.
Service
Department 		Service Dept.
Costs 		Costs Allocated to:
P1 P2
S1 Amount Amount Formula
S2 Amount Amount Formula
S3 Amount Amount Formula
Total: Formula Formula Formula