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ABC company has three production centers (X, Y, Z) and two service centers (A and B). Manufacturing overhead analysis provides the following data for production
ABC company has three production centers (X, Y, Z) and two service centers (A and B). Manufacturing overhead analysis provides the following data for production and service centers.
General expenses of production centers ($) | X | 48000 |
Y | 42000 | |
Z | 30000 | |
General expenses of service centers ($) | A | 14040 |
B | 18000 | |
Total | 152040 |
The expenses of service centers I and 2 are distributed as follows:
Production Centers | Service CENTERS | ||||
X | Y | Z | A | B | |
Service CENTER 1 (%) | 20 | 40 | 30 | 10 | |
Service CENTER 2 (%) | 40 | 20 | 20 | 20 |
Use the Simultaneous Equation Method (Reciprocal Method) to solve this exercise.
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