Harrison Company has two service departments, two production departments, and two products.

Information about the departments is as follows:

Service $1$

Service $2$

Production $1$

Production $2$

Total

Direct labor hours

$1,000$

$3,000$

$2,000$

$2,000$

$8,000$

Headcount

$5$

$6$

$6$

$8$

$25$

Direct costs

$$30,000$

$$40,000$

$$30,000$

$$200,000$

$$300,000$

Indirect costs $($labor hours$)$

$$60,000$

Indirect costs $($headcount$)$

$$20,000$

Service departments provide service to other departments as follows:

TO$..............................................................$

From

Service $1$

Service $2$

Production $1$

Production $2$

Service Dept. $1$

$-$

$25\%$

$15\%$

$60\%$

Service Dept. $2$

$20\%$

$-$

$20\%$

$60\%$

Required: Harrison uses the direct method of cost allocation. Calculate the cost allocated from Service Dept. $1$ to Production Dept. $1.$

Multiple choice question.

$$9,200$

$$8,000$

$$8,300$

$$6,000$

Need help? Review these concept resources.