Cost Allocation Using Direct Method:

Company XYZ has three service departments (A, B, and C) and two production departments (X and Y). The costs incurred by the service departments and the percentage of services used by each production department are as follows:

Department A: $10,000, used 20% by X and 30% by Y

Department B: $15,000, used 40% by X and 10% by Y

Department C: $20,000, used 40% by X and 50% by Y Allocate the costs of the service departments to the production departments using the direct method.