Motorcade Company has three service departments (S1, S2, and S3) and two production departments (P1 and P2).

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Motorcade Company has three service departments (S1, S2, and S3) and two production departments (P1 and P2). The following data relate to Motorcade's allocation of service department costs:
Nbr of Employees Budgeted Costs 75 S1 $3,000,000 S2 2,220,000 50 1,000,000 25 S3 P1 150 225 P2

Service department costs are allocated by the direct method. The number of employees is used as the allocation base for all service department costs.
Calculate the total service department cost allocated to each production department P1.
Calculate the total service department cost allocated to production department P1

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Managerial Accounting

ISBN: 978-1453375716

2nd edition

Authors: Kurt Heisinger, Joe Ben Hoyle

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