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the management of gympie has already allocated and apportioned the fixed overheads
for the period although she has yet to re-apportion the service center costs. information for the period as follows:Production department 1 2 Service department stores maintenance Total
allocated & apportioned $17500 $32750 $6300 $8450 $65000
Work done by :
Stores 60% 30% – 10%
Maintenance 75% 20% 5% –what are the total overheads included in production department 1 if the reciprocal method is used to
re=apportion the service
center cots ?I have few questions regarding this question.
1. It says reciprocal method so which can/should we use direct or step down method ?
2. Can you provide the full working to this solution, cant get a hold of it.
3. when we use step down method for such question do we need to keep on apportioning the cost till the service costs goes 0 ? meaning nothing is leftthe management of gympie has already allocated and apportioned the fixed overheads
for the period although she has yet to re-apportion the service center costs. information for the period as follows:allocated & apportioned
Production department (1) $17500 —— (2) $32750Service department (stores) $6300 (maintenance) $8450
Work done by :
Stores ———60% Department (1) 30% Department (2) Stores — 10% (Maintenance)Maintenance -75% Department (1) 20%Department (2) 5%Stores .(Maintenance) —
what are the total overheads included in production department 1 if the reciprocal method is used to
re=apportion the service
center cots ?I have few questions regarding this question.
1. It says reciprocal method so which can/should we use direct or step down method ?
2. Can you provide the full working to this solution, cant get a hold of it.
3. when we use step down method for such question do we need to keep on apportioning the cost till the service costs goes 0 ? meaning nothing is leftYou can’t use direct, it has to be step down so that overheads go backwards and forwards.
You keep going until amounts left are small (they won’t get to zero for a very long time). When attempting an OT question, you can stop when you identify an answer close enough.I can’t provide the workings on this forum.
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