The following information is departmental cost allocation with two service departments and two production departments.
Percentage Service Provided to
Department Cost S1 S2 P1 P2
Service 1 (S1) $ 40,000 0% 25% 30% 45%
Service 2 (S2) 31,000 20 0 20 60
Production 1 (P1) 210,000
Production 2 (P2) 260,000
What is the amount of service department cost allocated to P1 & P2 using the direct method if the cost in P1 is changed from $210,000 to $230,000.
Total Cost Allocated
P1
P2