Moccasin Corp $\text { Total department costs for the support and producing departments are as follows: }$

question 115

Essay

Moccasin Corp. has two support departments, A and B and two producing departments, P1 and P2. The distribution of services by the support departments is as follows: $\begin{array}{lllll}&&\text { Services Provided to }\\\text { Services Frovided from }&A&B&P1&P2\\A & - & 20 \% & 45 \% & 35 \% \\B & 20 \% & - & 30 \% & 50 \%\end{array}$
$\text { Total department costs for the support and producing departments are as follows: }$

$\begin{array}{lr}A & \$ 90,000 \\\mathrm{~B} & 150,000 \\\mathrm{P} 1 & 850,000 \\\mathrm{P} 2 & 700,000\end{array}$
Required:
Find the amount of total costs for P1 and P2 using the reciprocal method.

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Definitions:

Underapplied

Describes the situation where the allocated manufacturing overhead is less than the actual manufacturing overhead incurred.

Overapplied

A situation in which the allocated manufacturing overhead cost is more than the actual overhead cost incurred.

Overapplied Manufacturing Overhead

Occurs when the amount of overhead applied to products or jobs during a period is greater than the actual overhead costs incurred.

Finished Goods Inventory

The value of a company’s inventory of products that are completed and ready for sale.