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Need an answer for the following question.

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Week & Review questions - allocating service department costs The Medalina Company has 4 departments in its factory consisting of two service departments; $1 and $2, and two production departments; Pl and P2. Each of the production departments produce a single product. The current costs of each department are: $84,000 $2 $63.000 P1 $90,000 P2 $120,000 The distribution and consumption of departments' services is given in the following table: Service provided to: $1 $2 P1 P2 Services provided by: 40% 25% 35% 10% - 70% 20% 1. The total costs incurred by Department P2 after the allocation of the service department costs on the basis of the direct method would be: A $120,000 B $132,667 C $162,000 D $175,000 E $183,000 2. The total costs incurred by Department Pl after the allocation of the service department costs on the basis of the direct method would be higher (lower) than that incurred when costs are allocated using the step-down method as follows: A $12,133 higher B $31,033 higher $12,133 lower $31,033 lower E None of the above 3. If service department costs were allocated on the basis of the reciprocal method, then the total cost of service department $2 after solving the simultaneous equations and before allocation would be (to the nearest dollar): A $100,625 $96,600 $94,063 $90,300 $63,000