Schedule allocating the service department costs

Reference no: EM131136913

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 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 -- $49,000

S2 -- $93,500

S3 -- $18,000

Using the direct method, prepare a schedule allocating the service department costs to the producing departments.

Do not round while completing your calculations.

Could you please explain how to get the correct answers for this problem? Thanks!

Reference no: EM131136913

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