interdepartmental east allocation Retum to the three department example in Table 8.2. Suppose the LLAs are perfeetIy accurate and output is given by ql = 1,000 and CI2 = 2,000 units. Also suppose department 3' s eost is allocated to the other two departments.

a] Determine the unit eost for each produet assuming variable eosting and also assuming normal, full costing (with normal volume de fine d by the noted output of ql = 1,000 and q2 = 2,000 units).

b] Record the events in the respeetive departmental eost aeeounts. Normal, full eosting is used, and departments 1 and 2 each use two overhead accounts, one for locally incurred overhead and one for allocations from department 3.

c] Repeat part [b], but on the assumption the eost incurred in department 3 is eost3

= 275,000.

AppendixLO1