Ch7 #5

Robinson Products Company has two service departments (S1 and S2) and two production departments (P1 and P2). The distribution of each service departments efforts (in percentages) to the other departments is:

To

From. S1 S2 P1 P2

S1 - 20% 30% ?

S2. 20%. - ? 40

The direct operating costs of the departments (including both variable and fixed costs) are:

S1 $ 220,000

S2 74,000

P1 61,000

P2 175,000

Required:

1. Determine the total cost of P1 and P2 using the direct method.

2. Determine the total cost of P1 and P2 using the step method.

3. Determine the total cost of P1 and P2 using the reciprocal method.