Question
The Pingleton Company has four departments in its factory with two service departments, S1 and S2, and two production departments Assembly and Packaging. The current
The Pingleton Company has four departments in its factory with two service departments, S1 and S2, and two production departments Assembly and Packaging. The current costs of each department are:
Service Departments | Production Departments | ||
S1 | $350 000 | Assembly | $523 000 |
S2 | $208 000 | Packaging | $416 000 |
The distribution and consumption of services is given in the following table:
Services provided to: | ||||
S1 | S2 | Assembly | Packaging | |
Services provided by: | ||||
S1 | - | 25% | 45% | 30% |
S2 | 15% | - | 50% | 35% |
Using the direct method how much overhead cost will be allocated from S2 to Packaging:
A.
$72,800
B.
$104,000
C.
$85,647
D.
$122,353
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