Motorcade Company has three service departments (S1, S2, and S3) and two production departments (P1 and P2). The following data relate to Motorcade’s allocation of service department costs:
Motorcade Company has three service departments (S1, S2, and S3) and
two production departments (P1 and P2). The following data relate to Motorcade’s allocation of service department costs:
__________Budgeted Costs______________Nbr of Employees
S1__________$3,240,000__________________75
S2____________2,720,000__________________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
Calculate the total service department cost allocated to production department P1.
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