Cordner Corporation has two production Departments: P1 and P2 and two service departments: S1 and S2. Direct costs for each department and the proportion of service costs used by the various departments for the month of July are as follows:

				Proportion of Services Used by:
Department	Direct costs			S1		S2		P1		P2
S1	$	150,000				0.70		0.10		0.20
S2	$	182,000		0.20				0.30		0.50
P1	$	226,000
P2	$	142,000

Under the step-method of cost allocation, the amount of costs allocated from S2 to P2 would be:

a) $179,375.

b) $91,000.

c) $103,500.

d) $94,250.

Answer rating: 100% (QA)

a 179375 Step down method Particular S1 S2 P1 P2 Tota... View the full answer