1. Centaurus Company 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 November are as follows:

Proportion of Services Used by:

Department Direct costs S1 S2 P1 P2

S1 $ 60,000 0.70 0.10 0.20

S2 $100,000 0.20 0.30 0.50

P1 $160,000

P2 $140,000 Under the direct-method of cost allocation, the amount of S1 costs allocated to the S2 would be:

A. $42,000.

B. $20,000.

C. $0.

D. $6,000.

E. None of the above.

2. Sirus Company 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 November are as follows:

Proportion of Services Used by:

Department Direct costs S1 S2 P1 P2

S1 $ 60,000 0.70 0.10 0.20

S2 $100,000 0.20 0.30 0.50

P1 $160,000

P2 $140,000

Under the step-method of cost allocation and S1 costs are allocated first, the amount of costs allocated from S2 to P2 would be: A. $88,750.

B. $50,000.

C. $62,500.

D. $53,250.

E. None of the above.

3. Perseus Inc. has two support departments, Janitorial and Payroll, and two production departments,

Assembly and Finishing.

The step allocation method is used to assign support department costs to the production

departments. Payroll costs are allocated first.

A proxy for janitorial services is square footage and a proxy for payroll is number of employees.

Given the following information:

Janitorial Payroll Assembly Finishing

Direct costs $250,000 $275,000

Square feet 500 3,500 1,500

Number of employees 5 8 125 100

What would be the Janitorial Department allocation to the Finishing Department?

A. $68,182.

B. $69,812.

C. $75,000.

D. $76,793.

E. None of the above.