Reference no: EM131841523

Interdepartment Services: Step Method

Tucson Manufacturing Company has five operating departments, two of which are producing departments (P1 and P2) and three of which are service departments (S1, S2, and S3). All costs of the service departments are allocated to the producing departments.

The following table shows the distribution of services from the service departments.

	Services provided to
Services provided from	S1	S2	S3	P1	P2
S1	--	5%	25%	50%	20%
S2	10%	--	5	45	40
S3	15	5	--	20	60

The direct operating costs of the service departments are as follows:

S1	$63,000
S2	255,000
S3	21,000

Refer to the data above. Using the step method, prepare a schedule for Tucson Manufacturing Company allocating the service department costs to the producing departments. (Round calculations to the nearest dollar.)

	Service Departments			Producing Departments
	S1	S2	S3	P1	P2
Total costs