Question Two

A company has three production departments and two service departments, and for a period the departmental distribution summary has the following totals.

Production Departments:

P1- K 800; P2- K 700; P3- K500

Service Departments:

S1 K 234; S2- K300

The expenses of the service departments are charged out on a percentage basis as follows

P1 P2 P3 S1 S2

Service Department S1 20% 40% 30% - 10%

Service Department S2 40% 20% 20% 20% -

Prepare a statement showing the apportionment of two service departments expenses to production departments by:

a. Direct Method

b. Elimination method

c. Repeated Distribution Method