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Palermo Industries has two service departments, Accounting and Cafeteria and three production departments Mixing, Finishing...

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Question

Accounting

Palermo Industries has two service departments, Accounting and Cafeteria and three production departments Mixing, Finishing and Packaging. The following table shows the costs incurred at the two service departments, as well as the proportion of services provided by the two service departments to the other departments.

Costs

Incurred

Service

Department

Percent Allocable to

Acctg

Cafe

Mixing

Finish

Pack

$60,000

Accounting

45%

10%

20%

25%

100,000

Cafeteria

20%

30%

15%

35%

Required:

Allocate the service department costs to the production departments using the step method.

Service Department

Percent allocable to departments (revised)

Amount allocable to:

Dept

Answer & Explanation Solved by verified expert
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