: Cordner Corporation has two production departments, P1 and P2, and two service departments, S1 and S2. Direct costs for each department and the proportion
: Cordner Corporation has two production
departments, P1 and P2, and two service
departments, S1 and S2. Direct costs for each
department and the proportion of service
costs used by the various departments for the
month of July are as follows:
Proportion
of
Services
Used by:
Direct
Departmentcosts S1
S1
S2
P1
P2
60,000
100,000 0.20
160,000
140,000
S2 P1 P2
0.700.10 0.2O
0.300.50
Under the step-method of cost allocation, the
amount of costs allocated from S2 to P2
would be:
Select one:
a. $53,250.
b. $62,500.
c. $50,000
d. $88,750.
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