Interdepartment Services: Step Method Tucson Manufacturing Company has five operating departments, two of which are producing...
Interdepartment Services: Step Method
Tucson Manufacturing Company has five operating departments, two of
which are producing departments (P1 and P2) and three of which are
service departments (S1, S2, and S3). All costs of the service
departments are allocated to the producing departments. The
following table shows the distribution of services from the service
departments.
| Services provided to | |||||
|---|---|---|---|---|---|
| Services provided from |
S1 | S2 | S3 | P1 | P2 |
| S1 | -- | 5% | 25% | 50% | 20% |
| S2 | 10% | -- | 5 | 45 | 40 |
| S3 | 15 | 5 | -- | 20 | 60 |
The direct operating costs of the service departments are as follows:
| S1 | $63,000 |
| S2 | 170,000 |
| S3 | 16,000 |
Using the step method, prepare a schedule for Tucson Manufacturing Company allocating the service department costs to the producing departments. (Round calculations to the nearest dollar.)
| Service Departments | Producing Departments | ||||
|---|---|---|---|---|---|
| S1 | S2 | S3 | P1 | P2 | |
| Total costs | Answer | Answer | Answer | Answer | Answer |
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Interdepartment Services: Step Method
Tucson Manufacturing Company has five operating departments, two of
which are producing...
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