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Frenhs Forest Publishing Company Has Two Service Departments,S1 and S2,and \quad

question 42

Essay

Frenhs Forest Publishing Company has two service departments,S1 and S2,and two production departments,P1 and P2.
The data for May were as follows:
\quad \quad \quad \quad \quad \quad \quad \quad \quad \quad \quad  Services provided to: \text { Services provided to: }
 Activity  Costs  S1  S2  P1  P2  S1 $9000010%40%50% S2 $6000020%55%25% Fixed Costs  P1 $360000 P2 $520000\begin{array}{|c|c|c|c|c|c|}\hline \text { Activity } & \text { Costs } & \text { S1 } & \text { S2 } & \text { P1 } & \text { P2 } \\\hline \text { S1 } & \$ 90000 & & 10 \% & 40 \% & 50 \% \\\hline \text { S2 } & \$ 60000 & 20 \% & & 55 \% & 25 \% \\\hline & \text { Fixed Costs } & & & & \\\hline \text { P1 } & \$ 360000 & & & & \\\hline \text { P2 } & \$ 520000 & & & & \\\hline\end{array}
Required:
a.Set up algebraic equations in linear form for each activity.
b.Determine total costs for each department by solving the equations from part (a)using the reciprocal method.
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Definitions:

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