COMM 2020 Lecture 5: COMM 2020 03-01
19 Apr 2016
School
Department
Course
Professor
Document Summary
We have service departments (many: we have two diff production departments, these come down and have cost object, we can apply w/e overhead method we"re using, the service departments support the production departments. Each service department provide services to the production dept, to another service dept, or to its own service dept. We ignore the service dept providing service to another service dept or itself. So simply take into account how much of the service dept the production dept uses and allocate costs on a relative basis: step-down. Start w/ one service dept and we allocate its costs to all the other remaining service depts. Once we do that the first service dept is gone then we do it w/ the next service dept: reciprocal (we"re not doing this one) Problem 7-30: two production and two service dept, using t-accts direct method. Right side: 40k which goes to p1 left side, (calculated) 140k which goes to p2 left side.
