Problem

Assume that X Company has three service departments A,B,C and two producing departments X and Y.

Percentage of Service
Total Costs		A	B	C	X	Y
P200,000	A	--	10%	20%	30%	40%
P100,000	B	25%	--	15%	20%	40%
P300,000	C	--	--	--	20%	80%

REQUIRED:

1. Determine the service department costs allocated to each producing departments under the following methods:

a. Direct Method b. Reciprocal Method

	X	Y			X	Y
A				A
B				B
C				C
Total				Total

c. Step-down Method

	X	Y
A
B
C
Total

2. Assuming that the factory overhead costs of X and Y before allocation were P150,000 and P250,000 respectively, determine the total costs of X and Y under each method.

a. Direct Method b. Reciprocal Method c. Step-down Method

X ____________ X ____________ X ___________

Y ____________ Y ____________ Y ___________