Question 6

A factory consists oftwo production cost centers (G and H) and two service cost centers (J and K).The total overhead allocated and apportioned to each cost center are as follows:

GHJK

$40,000$50,000$30,000$18,000

The work done by the service cost centers can be represented as follows:

G H JK

Percentage of service cost center J to30%70%--

Percentage of service cost center K to50%40%10%-

The company apportions service cost center costs to production cost centers using a method that fully recognizes any work done by one service cost center for another. (Hint: repeated distribution or algebra method)