Which method do we use to alocate ? do we have to use simultaneous between SC1 and SC2 ? if so, what to I do with the 500 that SC2 recieves from SC3 ?
Hello Gabriela!
I know the exercise isn't exactly clear about what method you should use. Since no other Service Cost Centre allocates costs to SC3, you can start my allocating costs from SC3 to the other Cost centres.
Then, you should use the simultaneous method with SC1 and SC2.
You can do the simultaneous method straight away also, your system would look something like
SC1 = 7175 + SC2 * (5/50)
SC2 = 2000 + SC1 * (100/1000) + SC3 * 0,5
SC3 = 1000
Because you know SC3, your system will only have 2 unknowns and you are able to solve it.
Hope this helps!
Pedro Perdigão
I know the exercise isn't exactly clear about what method you should use. Since no other Service Cost Centre allocates costs to SC3, you can start my allocating costs from SC3 to the other Cost centres.
Then, you should use the simultaneous method with SC1 and SC2.
You can do the simultaneous method straight away also, your system would look something like
SC1 = 7175 + SC2 * (5/50)
SC2 = 2000 + SC1 * (100/1000) + SC3 * 0,5
SC3 = 1000
Because you know SC3, your system will only have 2 unknowns and you are able to solve it.
Hope this helps!
Pedro Perdigão