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) | ||||
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| Amount allocable to: | ||||
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