Under the step method of cost allocation

Reference no: EM131025440

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: EM131025440

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