Simba Company Has Three Service Departments, A, B, and C

question 46

Essay

Simba Company has three service departments, A, B, and C, and two production departments, P1 and P2. Costs in departments A and B are allocated based on square feet, and costs in department C are allocated based on direct- labor hours.
The following data are available: $\begin{array}{l}&\text { Direct } & \text { Square Feet } & \text { Direct- } \\&\text { Department Costs} & \text { Occupied } & \text { Labor }\\&&&\text { Hours }\\\text { Service Dep artment: }\\\mathrm{A} & \$ 300,000 & 6,000 & 13,000 \\\text { B } & 225,000 & 4,000 & 7,000 \\\text { C } & 480,000 & 3,000 & 6,000\text { Production }\\\text { Department: }\\\text { P1 } & \$ 750,000 & 8,000 & 17,000 \\\text { P2 } & 600,000 & 7,000 & 15,000\end{array}$ Required:
Assuming the direct method of allocating costs, determine the amount of each service department's costs that will be allocated to each production department.

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Definitions:

Segregation

The enforced separation of different racial or social groups within a community, institution, or country, leading to inequality.

Law of Segregation

A fundamental principle of genetics stating that during the formation of gametes, the two alleles responsible for a trait separate, allowing each parent to contribute one allele.

Law of Heredity

Describes the principles guiding how traits are passed from parents to offspring, traditionally referenced in the context of genetics and biological inheritance.