Question - Marvin Company has three service departments, S1, S2,and S3, and two production departments, P1 and P2. The following data relate to Marvin's allocation of service department costs:
Budgeted Cost Number of employees
S1 $4,500,000 90
S2 3,000,000 60
S3 2,700,000 40
P1 200
P2 300
Service department cost are allocated by the direct method. The number of employees is used as the allocation base for all service department cost.
Question A) Allocate service department cost to production departments.
Question B) Calculate the total service department cost allocated to each production department.