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CoursHeroTranscribedText: _ea Company has two service departments and three producing departments each producing a separate...

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Accounting

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CoursHeroTranscribedText: _ea Company has two service departments and three producing departments each producing a separate product. For a number ofyears, 1e company has allocated the overhead costs of the service departments to the producing departments on the basis of annual sales pesos which lead serious inequities. The auditor recommended that maintenance and engineering service hours he used as a better service cost allocation basis. The following data was available: Service Departments Producing Departments Maintenance Engineering Dept A Dept B Dept C Maintenance Hours 400 800 200 200 Engineering Hours 400 800 400 400 Overhead Costs P12,000 P54,000 P80,000 P90,000 PSODOO

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