Problem: Motorcade Company as three service departments (S1, S2, S3) and two production departments (P1 and P2). The following data relate to Motorcade's allocation of service department costs:
|
|
Budgeted Costs
|
Number of Employees
|
|
S1
|
$3,200,000
|
75
|
|
S2
|
2,200,000
|
50
|
|
S3
|
1,000,000
|
25
|
|
P1
|
|
150
|
|
P2
|
|
225
|
Service department costs are allocated by the direct method. The number of employees is used as the allocation base for all service department costs
Required: Calculate the total service department cost allocated to production department P1.
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