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Evergreen Company has two support departments (S1 and S2) and two producing departments (P1 and...

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Accounting

Evergreen Company has two support departments (S1 and S2) and two producing departments (P1 and P2). Department S1 costs are allocated on the basis of number of employees, and Department S2 costs are allocated on the basis of space occupied expressed in square feet. Data on direct department costs, number of employees, and space occupied are as follows:

S1

S2

P1

P2
Direct dept. costs

$7,500

$11,000

$27,500

$30,000

Number of employees

10

5

20

25
Space occupied (sq. ft.)

1,000

500

1,500

2,500

If Evergreen uses the direct method, the ratio representing the portion of Department S2 allocated to P1 is

Select one:

a. 1,500/5,000.

b. 1,500/4,000.

c. 1,500/5,500.

d. 1,500/2,000.

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