Day Corporation has two service departments - Power supply and Repairs and Maintenance and TWO production departments - Fabrication and Assembly. The Controller is new and has asked you to assist him in allocating the service department costs to the two production departments, for the most recent fiscal year that ended December 31, 2020. The actual power consumption in Kwh and labor hours of repairs and maintenance services used in each department, during fiscal 2020 is given below.

KWh of Power Labor Hours of Repairs

Power Supply (S) 100 20

Repairs and Maintenance(S) 200 0

Fabrication (P) 500 30

Assembly(P) 200 50

Total 1000 100

The total (actual) variable cost of providing power supply was $660 and that of providing repairs and maintenance services was $1000. Fixed Costs are additional and not included here.

1. SET UP the reciprocal cost equations necessary to allocate the TWO SERVICE department costs to the two production departments using the Reciprocal Method. (YOU DO NOT HAVE TO SOLVE THE EQUATIONS)