Rust Company has two support departments (S1 and S2) and two producing departments (X and Y).Department S1 serves Departments S2, X, and Y in the following percentages, respectively: 10%, 35%, 55%.Department S2 serves Departments S1, X, and Y in the following percentages, respectively: 6%, 50%, and 44%.Direct department costs for S1, S2, X, and Y are $15,000, $8,000, $105,000, and $97,500, respectively.
- What are the total costs to be allocated from Department S1?

Question

Quizplus · Accepted Answer

1. Allocate S1's cost to S2, X, and Y:
- S2: $15,000 x 10% = $1,500
- X: $15,000 x 35% = $5,250
- Y: $15,000 x 55% = $8,250

2. Allocate S2's cost to S1, X, and Y:
- S1: $8,000 x 6% = $480
- X: $8,000 x 50% = $4,000
- Y: $8,000 x 44% = $3,520

3. Total costs to be allocated from S1:
- Direct costs of S1: $15,000
- Allocated costs from S2: $480
- Allocated costs from X: $4,000
- Allocated costs from Y: $3,520
- Total: $15,000 + $480 + $4,000 + $3,520 = $15,573

Rust Company Has Two Support Departments (S1 and S2) and Two