Brandeis corporation has two production departments

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Brandeis Corporation has two production Departments: P1 and P2 and two service departments: S1 and S2. Direct costs for each department and the proportion of service costs used by the various departments for the month of July are as follows:

   

Proportion of Services Used by:

Department

Direct costs

S1

S2

P1

P2

S1

$70,000

 

0.70

0.10

0.20

S2

$110,000

0.20

 

0.30

0.50

P1

$170,000

       

P2

$150,000

       

Under the step-method of cost allocation, the amount of costs allocated from S2 to P2 would be: 

$99,375.
$55,000.
$68,750.
$56,750. 

Reference no: EM13934840

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