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Question 1 (1 point) Motorcade Company has three service departments (S1, S2, and S3) and two production departments (P1 and P2). The following data relate

Question 1 (1 point)

Motorcade Company has three service departments (S1, S2, and S3) and two production departments (P1 and P2). The following data relate to Motorcade's allocation of service department costs:

Budgeted Costs

Nbr of Employees

S1

$3,240,000

75

S2

2,480,000

50

S3

1,000,000

25

P1

150

P2

225

Service department costs are allocated by the direct method. The number of employees is used as the allocation base for all service department costs

Calculate the total service department cost allocated to production department P1

Question 3 (1 point)

Infinity Designs, an interior design company, has experienced a drop in business due to an increase in interest rates and a corresponding slowdown in remodeling projects. To stimulate business, the company is considering exhibiting at the Home and Garden Expo. The exhibit will cost the company $12,000 for space. At the show, Infinity Designs will present a slide show on a PC, pass out brochures that are printed previously, (the company printed more than needed), and show its portfolio of previous

jobs.

The company estimates that revenue will increase by $36,000 over the next year as a result of the exhibit. For the previous year, profit was as follows:

Revenue

$201,000

Less:

Design supplies (variable cost)

$15,000

Salary of Samantha Spade (owner)

80,000

Salary of Kim Bridesdale (full time employee)

55,000

Rent

18,000

Utilities

6,000

Depreciation of office equipment

3,600

Printing of advertising materials

700

Advertising in Middleton Journal

2,500

Travel expenses other than depreciation of autos (variable cost)

$2,800

Depreciation of company cars

9,000

Required:

Calculate the impact of the exhibit on company profit.

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