Scanner Corporation has two producing departments and two service departments labeled P1, P2, S1 and S2, respectively. Direct costs for each department and the proportion of service costs used by various departments are as follows: A. Allocate the service department costs to producing departments and compute the factory overhead rate for P1 using STEP METHOD (Start with S1)

B. Using the information in Problem 4, allocate the service department costs to producing departments and compute the factory overhead rate for P2 using ALGEBRAIC METHOD.

Proportions of Services Used by: si S2 P1 P2 Cost Center P1 P2 si S2 Direct Costs 90,000.00 60,000.00 20,000.00 32,000.00 0.80 0.10 0.50 0.20 0.10 0.30 In calculating predetermined overhead rats, machine hours are used as the based in P1 and direct labor hours as the base in P2. PI P2 Machine hours 50,000 40,000 Direct Labor hours 40,000 20,000