Evergreen Company has two support departments (S1 and S2) and two producing departments (P1 and...
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Accounting
Evergreen Company has two support departments (S1 and S2) and two producing departments (P1 and P2). Department S1 costs are allocated on the basis of number of employees, and Department S2 costs are allocated on the basis of space occupied expressed in square feet. Data on direct department costs, number of employees, and space occupied are as follows:
S1
S2
P1
P2
Direct dept. costs
$7,500
$11,000
$27,500
$30,000
Number of employees
10
5
20
25
Space occupied (sq. ft.)
1,000
500
1,500
2,500
If Evergreen uses the direct method, the ratio representing the portion of Department S2 allocated to P1 is
a.1,500/5,500.
b.1,500/5,000.
c.1,500/2,000.
d.1,500/4,000.
Algonquin Products produces two products, X and Y, in a single process. In 2011, the joint costs of this process were $25,000. In addition, 4,000 units of X and 6,000 units of Y were produced. Separable processing costs beyond the split-off point were X-$10,000; Y-$20,000. X sells for $10.00 per unit; Y sells for $7.50 per unit. What is the gross profit of product Y assuming the net realizable value method is used?
a.$16,364
b.$13,636
c.$45,000
d.$30,000
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