The following information is departmental cost allocation with two service departments and two production departments

Accounting May 27, 2021

The following information is departmental cost allocation with two service departments and two production departments.

Percentage Service Provided to Department Cost 51 52 P1 P2 Service 1 (51) $ 49,000 0% 30% 35% 35% Service 2 (52) 39,000 25 0 45 30 Production 1 (P1) 290,000 Production 2 (P2) 340,000

What is the amount of service department cost allocated to P1 and P2 using the direct method if the cost in P1 is changed from $290,000 to $310,000?
Total Cost Allocated
P1
P2

Expert Solution

Service department cost allocated to P1 and P2:

	P1	P2
S1	49000*35/70 = 24,500	49000*35/70 = 24,500
S2	39000*45/75 = 23,400	39000*30/75 = 15,600
Total	47900	40100

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