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A Corporation has two service departments, S1 and S2, and three production departments, P1, P2,...

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Accounting

A Corporation has two service departments, S1 and S2, and three production departments, P1, P2, and P3. Data for a recent month follow:

Service Provided to: S1 S2 P1 P2 P3
S1 0.10 0.20 0.40 0.30
S2 0.30 0.20 0.40 0.10
Costs $ 200,000 $ 100,000 $ 600,000 $ 800,000 $ 1,000,000

a. Compute the allocation of service department costs to producing departments using the direct method.

b. Compute the allocation of service department costs to producing departments using the step-down method.

c. Compute the allocation of service department costs to producing departments using the reciprocal method.

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