6. Florin Corporation has four service departments, S1, S2, S3, and S4, and three production departments, P1, P2, and P3. The budgeted overhead data for 2015 are as follows: Activity S1 S2 S3 S4 P1 P2 P3 Overhead Cost $100,000 Driver employees 60,000 requisitions 70,000 square feet 50,000 labor hours 600,000 400,000 100,000 Service is provided as follows: Activity S1 $1-employees: 40 S2-requisitions: 30 S3-square feet: 10 S4-labor hours: 10 22222 S3 S4 P1 P2 P3 10 20 10 10 30 10 20 10 20 20 40 60 20 30 20 40 50 60 20 10 10 60 40 20 Using the reciprocal method of cost allocation, set up an algebraic equation that represents the total cost of S2. Use fractions, not decimals, where appropriate. 7. The Cole Corporation employs a job order cost system for the manufacture of chairs. The company applies (allocates) overhead to its jobs and accordingly in 2015 applied the following amounts of overhead to the accounts listed below: Work in Process Finished Goods Cost of Goods Sold Balances in the accounts listed below are: $25,000 75,000 900,000 Factory overhead (actual for 2015) $1,200,000 Direct materials, December 31, 2015 Work in Process, December 31, 2015 10,000 100,000 Finished Goods, December 31, 2015 750,000 Cost of Goods Sold, 2015 3,000,000 Compute the difference in gross margin for 2015 using (1) the simplest method versus (2) the most conceptually preferable method of accounting for the under/overapplied overhead.