Question
Robinson Products Company has two service departments (S1 and S2) and two production departments (P1 and P2). The distribution of each service department's efforts (in
Robinson Products Company has two service departments (S1 and S2) and two production departments (P1 and P2). The distribution of each service department's efforts (in percentages) to the other departments is:
To
From S1 S2 P1 P2
S1 10% 20% ?%
S2 10% ? 30
The direct operating costs of the departments (including both variable and fixed costs) are:
S1 $ 180,000
S2 60,000
P1 50,000
P2 120,000
Required:
1. Determine the total cost of P1 and P2 using the direct method.
2. Determine the total cost of P1 and P2 using the step method.
3. Determine the total cost of P1 and P2 using the reciprocal method.
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