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