Interdepartment Services: Direct Method (LO2)

Tucson Manufacturing Company has five operating departments, two of which are producing departments

(P1 and P2) and three of which are service departments (SI, S2, and S3). All costs of the service departments are allocated to the producing departments. The following table shows the distribution of services from the service departments.

Services Services Provided to provided -

from | $1 $2 $3 P1 P2 Seas cleans — 5% 25% 50% 20%

SOU re 10% = 5 45 40 Ship reas We 5 _ 20 60 Silic Mine $42,000 So ee 85,000 SS We tle oul 19,000 Required Using the direct method, prepare a schedule allocating the service department costs to the producing departments.