Percentage Service Provided toDepartment Cost S1 S2 P1 P2Service 1 (S1) $ 112,000 0% 40% 40% 20%Service 2 (S2) 44,000 20 0 40 40Production 1 (P1) 345,000Production 2 (P2) 216,000Total $ 717,000Brief Exercises 7-15 and 7-16 require the following information:7-15 What percentage of S1’s costs is allocated to P1 and to P2 under the direct method?7-16 What percentage of S2’s costs is allocated to P1 and to P2 under the direct method?
Breakeven Analysis
Break Even Analysis is a term used in business, cost accounting and economics. It refers to a point where the total cost incurred becomes equal to the total revenue earned. Break Even Analysis determines the number of units to be sold to earn the revenue required to cover the total costs. Total cost is a sum total of fixed and variable costs.
Process analysis
The term process analysis can be defined as breakdown of production process into different phases that converts inputs into output. A series of routine activities are incorporated using organizational resources with a view to achieve operational excellence.
Percentage Service Provided to
Department Cost S1 S2 P1 P2
Service 1 (S1) $ 112,000 0% 40% 40% 20%
Service 2 (S2) 44,000 20 0 40 40
Production 1 (P1) 345,000
Production 2 (P2) 216,000
Total $ 717,000
Brief Exercises 7-15 and 7-16 require the following information:
7-15 What percentage of S1’s costs is allocated to P1 and to P2 under the direct method?
7-16 What percentage of S2’s costs is allocated to P1 and to P2 under the direct method?
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