Reapportionment of service department costs JR Co. Ltd’s budgeted overheads for the forthcoming period applicable to its production departments, are as follows:

Required:
Apportion the service department costs to production departments:
(i) using the step-wise (‘elimination’) method, starting with G;
(ii) using the reciprocal (simultaneous equation)
method;
(iii) commenting briefly on your figures.

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(000) 1 870 2 690 The budgeted total costs for the forthcoming period for the service departments, are as follows: (000) G 160 H 82 The use made up each of the services has been estimated as follows: