LLG Company has two service departments (S1 and S2) and two producing departments (P1 and P2). Estimated direct costs and percentages of services used by other departments are as follows:

Service Dept.	S1	S2	P1	P2
S1		20%	35%	45%
S2	40%		40%	20%
Direct costs	$16,000	$30,000	$20,000	$30,000

Required:

a. Prepare a schedule allocating the service department costs to the producing departments using the direct allocation method.

b. Prepare a schedule allocating the service department costs to the producing departments using the step allocation method.