Question
A company has three service deparrtments, 'Energy', 'Maintenance', and 'IT-Support'. The exchange of services between service departments of the last period is shown below: The
A company has three service deparrtments, 'Energy', 'Maintenance', and 'IT-Support'. The exchange of services between service departments of the last period is shown below:
The service department 'Energy' generates a total of 5,000 kilowatt hours (kWh) and total overhead costs are at 200,000. The second service department 'Maintenance' provides a total of 2,000 hours and total overhead costs are at 80,000. 'IT-Support' provides a total of 3,000 hours and total overhead costs are at 120,000.
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Please name the three approaches you know to allocate costs from the service departments to the production departments in job-order costing. (3P)
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Please calculate the allocation rate for each of the three service cost centers to allocate their departmental costs to operating departments. (9P)
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