Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Question 24 5 pts The Rusted Root Company has two service departments (A and B) and two production departments (P1 and P2). Department A allocates
Question 24 5 pts The Rusted Root Company has two service departments (A and B) and two production departments (P1 and P2). Department A allocates costs using machine hours. Department B allocates costs using kilowatt hours. There are 10,000 machine hours in Department B, 40,000 in Department P1 and 50,000 in Department P2. There are 8,000 kilowatt hours in Department A, 18,000 in Department P1, and 14,000 in Department P2. The company does NOT allocate variable and fixed service costs separately. The total cost in Department A is $80,000, which is made up of $30,000 in variable costs, $40,000 in a supervisor's salary, and $10,000 in depreciation. The total cost in Department B is $50,800, which is made up of $20,000 in variable costs, $25,000 in a supervisor's salary, and $5,800 in depreciation. Using the algebraic method, how much total service cost would be allocated to Department P1? Show me (1) the formulas that you I would need to solve simultaneously, (2) the reallocated costs, and (3) the formula used to charge costs into P1, and (4) the amount of service costs charged to P1. Edit View Insert Format Tools Tahle Question 25 3 Refer to question 24. If the Rusted Root wanted to outsource Department B, how many kilowatt hours would need to be purchased from an outside power company? Question 26 4 pts Refer to questions 24 and 25. What is the relevant internal cost of keeping Department B. In other words, how much could the company save by discontinuing Department B? You may assume that the supervisor in Department B would be fired if Department B is outsourced. TJ
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started