Exercise E6-8 Allocation of Service Department Costs
Marvin Company has three service departments (S1, S2, and S3) and two production departments (P1 and P2). The following data relate to Marvin's allocation of service department costs:
			Budgeted Costs	Nbr of Employees
		S1	$4,000,000	80
		S2	3,000,000	60
		S3	2,000,000	30
		P1		200
		P2		300
Service department costs are allocated by the direct method. The number of employees is used as the allocation base for all service department costs.
Required:
a. Allocate service department costs to production departments.
		Nbr of employees:	Total Employees:	% of Employees:
	P1	Number	Number	Formula
	P2	Number	Number	Formula
b. Calculate the total service department cost allocated to each production department.
		Service Department	Service Dept. Costs	Costs Allocated to:
				P1	P2
		S1	Amount	Amount	Formula
		S2	Amount	Amount	Formula
		S3	Amount	Amount	Formula
		Total:	Formula	Formula	Formula