Craylon Corp has two service departments, S1 and S2, and two ...

[jrubin]

Question 1

When budgeted fixed costs are allocated based on actual usage, user departments will not know their fixed-cost allocations until the end of the budget period.
◦ true
◦ false

Question 2

Craylon Corp has two service departments, S1 and S2, and two production departments, P1 and P2. 

The data for April were as follows: 

​

​

Services provided to:

Activity	Costs	S1	S2	P1	P2
S1	$100,000	​	20%	40%	50%
S2	$80,000	10%	​	55%	25%
​	Fixed Costs	​	​	​	​
P1	$400,000	​	​	​	​
P2	$500,000	​	​	​	​

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.

[orangecrush]

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[jrubin]

Thanks for the timely response, appreciate it

[alvinum]

Excellent