Pat’s Print Shops has a warehouse that supplies paper and other supplies to its store locations.

It has two service departments, Information Services (S1) and Operation Support (S2), and two operating departments, Printing (P1) and Customer Service (P2). As an internal auditor, you are Bini checking the company’s procedures for cost allocation. You find the following cost allocation results for September:

Total costs for the two service departments are $50,000.
Operation Support’s services are provided as follows:
* 50 percent to Printing.
* 30 percent to Customer Service.
The direct method of allocating costs is used.

Required

a. What are the total service department costs (S1 + $2) allocated to P2?

b. Complete the following:

c. What proportion of S1’s costs were allocated to PI and P2?

Transcribed Image Text:

Costs allocated to P1.... Costs allocated to P2.... $20,000 from $1 ? from S2 ? from S1 $11,250 from $2