Frank's Foods has a warehouse that supplies products to its store locations. The warehouse has two service departments, Information Services (S1) and Operation Support (S2), and two operating departments, Order Processing (P1) and Delivery (P2). As an internal auditor, you are checking the company's procedures for cost allocation. You find the following cost allocation results for September:
Costs allocated to P1 . . . . . . $48,000 from S1? from S2
Costs allocated to P2 . . . . . . ? from S1 $27,000 from S2
Total costs for the two service departments are $120,000.
Operation Support's services are provided as follows:
€¢ 50 percent to Order Processing.
€¢ 30 percent to Delivery.
The direct method of allocating costs is used.
Required
a. What is the total service department costs (S1 + S2) allocated to P2?
b. Complete the following:

c. What proportion of S1's costs was allocated to P1 and P2?

Transcribed Image Text:

To From Order Processing Delivery Information Services ...$42,000 Operation Support $27,000