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

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

Transcribed Image Text:

(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 of each of the services has been estimated as follows. Production department Service department 1 2 G H G(%) 60 30 110