Reference no: EM132659992

Cyber co's overheads look like follows: Production Department 1: $870,000 Production Department 2: $690,000 Service Department 1: $160,000 Service Department 2: $82,000 Service Department 1 provides 60% of its services to Production Department 1, 30% to Production Department 2, and 10% to Service Department 2. Service Department 2 provides 55% of its services to Production Department 1, 40% to Production Department 2, and 5% to Service Department 1.

Problem 1: How much is allocated from Service Department 1 to Production Department 1 using the direct allocation method?

A) $106,667

B) $96,000

C) $976,667