Dear Tutor,

Could you please help me with the calculations below? Somehow I cannot get the correct answers.

Thanks a lot in advance!

Given the following relationships and costs of the primary cost centers P (support departments) and final cost centers F (operating departments):

	Primary cost centers	Final cost centers
	P1	P2	F1	F2
Primary indirect costs ()	10,000	20,000	5,000	15,000
Units to...	P1	P2	F1	F2
Units from...
P1	0	0	30	70
P2	20	0	60	20

a)Please calculate the transfer price in / unit for the internal cost allocation using thedirect allocation methodfor P2.

b)Please calculate the transfer price for P2 in / unit for the internal cost allocation using thestep-down allocation method. Please use the following sequence: P2-> P1.

c)Please calculate the transfer price for P1 in / unit for the internal cost allocation using thestep-down allocation method. Please use the following sequence: P2-> P1.