Departmental Distribution of Actual Overhead—Simultaneous Method. The controller of Planter Corporation instructs the cost supervisor to use an algebraic procedure for allocating service department costs to producing departments. The corporation’s three producing departments are served by three service depart¬ ments, each of which consumes part of the services of the other two. After primary but before reciprocal dis¬ tribution, the account balances of the service departments and the interdependence of the departments were tabulated as follows:
Department Departmental Overhead Before Distribution of Service Departments Services Provided Powerhouse Personnel General Factory Mixing.
. $200,000 25%
35%
25%
Refining.
. 90,000 25 30 20 Finishing.
. 105,000 20 20 20 Powerhouse.
. 16,000 —
10 20 Personnel.
. 29,500 10 —
15 General Factory.
. 42,000 20 5 —
$482,500 100%
100%
100%
Required:
(1) Compute the final amount of overhead of each service department after reciprocal transfer costs have been calculated algebraically.
(2) Compute the total factory overhead of each producing department.