Allocate the service department costs to operating departments and compute the factory overhead rate for P1 and P2 using

1. Direct method

2. Step method

3. Algebraic method

Thermal Corporation has two producing department and two service departments labelled P1, P2, S1, S2 respectively. Direct costs for each department and the proportion of service costs used by various departments are as follows: Proportion of services used by: Cost Center Direct Costs S1 S2 P1 P2 P1 P100,000 P2 P50,000 S1 P15,000 50% 20% 30% S2 P25,000 15% 50% 35% In calculating predetermined overhead rates, machine hours are used as the base in P1 and direct labor hours as the base in P2. P1 P2 Machine hours 50,000 40,000 Direct labor hours 40,000 20,000 Allocate the service department costs to operating departments and compute the factory overhead rate for P1 and P2 using Algebraic Method How much is the Department oh Rate of P1 after allocation. Round off to two decimal places along the computation