(Answered) The following information is departmental cost allocation

Management Studies

The following information is departmental cost allocation with two service departments and two production departments.

Percentage Service Provided to

Department Cost S1 S2 P1 P2

Service 1 (S1) $ 40,000 0% 25% 30% 45%

Service 2 (S2) 31,000 20 0 20 60

Production 1 (P1) 210,000

Production 2 (P2) 260,000

What is the amount of service department cost allocated to P1 & P2 using the direct method if the cost in P1 is changed from $210,000 to $230,000.

Total Cost Allocated

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