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PROBLEM #3. MANUFACTURING OVERHEAD ACCOUNTING (50 POINTS) TWO service departments and two producing departments make up Borres Company. Not only do the two service departments
PROBLEM #3. MANUFACTURING OVERHEAD ACCOUNTING (50 POINTS) TWO service departments and two producing departments make up Borres Company. Not only do the two service departments serve two different production departments, but they also serve one another. The following is a breakdown of the expenses of four departments and their relationships: Department SERVICES PROVIDED DEPT V DEPT W Departmental Overhead before distribution P600,000 800,000 363,000 200,000 P1,963,000 Producing Department A Producing Department B Service Department V Service Department W 40% 403 20% 50% 30% 208 1. Allocate the cost of service departments to producing departments and compute for their total overhead costs after allocation using the following independent methods: a. DIRECT METHOD b. STEP METHOD (ALLOCATE DEPARTMENT W FIRST) C. ALGEBRAIC METHOD 2. Which among the Three Methods gives you the most allocation? Support your answer. accurate overhead
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