production department overheads

Dept 1	1,070,000 $
Dept 2	750,000$

Service department over heads

Dept G	160,000$
Dept H	82,000 $

The following percentages reflect the use made of the services

	dept1	dept 2	Dept G	Dept H
dept G	60%	30%		10%
Dept H	50%	30%	20%

All direct labor is paid 5$ per hour. The company holds no stock.

a) calculate the service department cost to production department using the following methods

i) specified order closing

ii) simultaneous equation method

b) Explain the difference in the results while use the two methods above.