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

question 34

Essay

Fox Company has two support departments (S1 and S2) and two producing departments (P1 and P2). Estimated direct costs and percentages of services used by these departments are as follows: $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$$\text {Used by Department}$
$\begin{array} { c c c c c } \text { Support Dept. } & \underline { \mathrm { S } 1 } & \underline { \mathrm { S } 2 } & \underline { \mathrm { P } 1 } & \underline { \mathrm { P } 2 } \\ \mathrm {~S} 1 & - & 10 \% & 40 \% & 50 \% \\ \mathrm {~S} 2 & 20 \% & - & 50 \% & 30 \% \\ \text { Direct costs } & £ 4,500 & £ 8,000 & £ 10,000 & £ 15,000 \end{array}$

a.Prepare a schedule allocating the support department costs to the producing departments using the direct allocation method.
b.Prepare a schedule allocating the support department costs to the producing departments using the sequential allocation method.

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Definitions:

Innovation

The process of introducing new ideas, devices, or methods to create value or solve problems, often leading to improvements in efficiency, products, or services.

Locus of Control

A psychological concept referring to the degree to which people believe they have control over the outcome of events in their lives, as opposed to external forces beyond their control.

Own Efforts

The personal endeavor or work done by an individual to achieve a goal without relying on the assistance of others.

Small Business Manager

A professional responsible for overseeing the day-to-day operations and decision-making of a small business.