Interdepartment Services: Direct Method

Tucson Manufacturing Company has five operating departments, two of which are producing departments (P1 and P2) and three of which are service departments (S1, S2, and S3). All costs of the service departments are allocated to the producing departments. The following table shows the distribution of services from the service departments.

Services provided toServices

provided

fromS1S2S3P1P2S1--5%25%50%20%S210%--54540S3155--2060

The direct operating costs of the service departments are as follows:

S1$35,000S2170,000S315,000

Using the direct method, a schedule allocating the service department costs to the producing departments.

Do not round while completing your calculations.

Service DepartmentsProducing DepartmentsS1S2S3P1P2Total costs

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Interdepartment Services: Direct Method Tucson Manufacturing Company has five operating departments, two of which are producing departments (P1 and P2) and three of which are service departments ($1, $2, and $3). All costs of the service departments are allocated to the producing departments. The following table shows the distribution of services from the service departments. Services provided to Services provided from $1 $2 53 P1 P2 $1 - 5% 25% 50% 20% S2 10% 5 45 40 53 15 5 20 60 The direct operating costs of the service departments are as follows: S1 $35,000 S2 170,000 S3 15,000 Using the direct method, prepare a schedule allocating the service department costs to the producing departments. Do not round while completing your calculations. Service Departments Producing Departments S1 S2 53 P1 P2 Total costs $ $ $ $ $