5 Direct, step and reciprocal methods of overhead allocation: 3 service departments The Complex Company has five departments in its factory of which P, and P2 are the only producing departments. The current costs of each department are: Service Department A B $20 000 $40 000 $20 000 Production Department PL P2 $70 000 $70 000 The consumption of services is given in the following table: A Service provided by - Service provided to B C P1 30% 35% 40% 10% 50% A B P2 35% 20% 30% 40% 10% Allocate service department costs to production departments by (a) the direct method (b) the step method (c) the reciprocal services method