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I'm doing a traditional absorption costing question but when it comes to the direct method, specified order of closing method and repeated distribution method I'm
I'm doing a traditional absorption costing question but when it comes to the direct method, specified order of closing method and repeated distribution method I'm confused as to why the items like general and stores are allocated to different departments in each method and I'm unsure how service departments are apportioned in both the specified order of closing method and repeated distribution method, for example the two 14s in specific order service dept maintenance section.
The general department consists of the factory manager, and general clerical and wages personnel. Prepare an overhead analysis sheet for the departments of the factory for the year using three methods: (a) Ignoring the fact that service departments serve one another ie the direct method. (b) Taking account of the fact that service departments serve one another using the 'specified order of closing/elimination method. (c) Taking account of the fact that service departments serve one another using the 'continuous allotment/ repeated distribution method. You should also calculate appropriate overhead absorption rates for each production department for each method (Step 3)Step by Step Solution
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