Consider a firm with three service departments (S1?S3) with a pattern of usage as follows:

That is, service department S2 uses 10 percent of the service from S1, service department S3 uses 30 percent, and production departments use 60 percent. If the company uses the step method of service department cost allocation, which service department should be allocated last? Explain.

Transcribed Image Text:

S3 Production S1 S2 Si 60% 10% 30% S2 0% 0% 100% S3 50% 20% 30%