Craylon Corp Has Two Service Departments,S1 and S2,and Two Production

Essay

Craylon Corp has two service departments,S1 and S2,and two production departments,P1 and P2.
The data for April were as follows:
$$\begin{array} { | l | l | c | c | c | c | } \hline & & { \text { Services provided to: } } \\\hline \text { Activity } & \text { Costs } & \text { S1 } & \text { S2 } & \text { P1 } & \text { P2 } \\\hline \text { S1 } & \$ 100,000 & & 20 \% & 40 \% & 50 \% \\\hline \text { S2 } & \$ 80,000 & 10 \% & & 55 \% & 25 \% \\\hline & \text { Fixed Costs } & & & & \\\hline \text { P1 } & \$ 400,000 & & & & \\\hline \text { P2 } & \$ 500,000 & & & & \\\hline\end{array}$$ 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.