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The company has two support departments, A1 and A2, and two producing departments, P1 and P2. S1 costs of $364,000 are allocated on the basis

The company has two support departments, A1 and A2, and two producing departments, P1 and P2. S1 costs of $364,000 are allocated on the basis of standard service used. A2 costs of $58,000 are allocated on the basis of number of employees. The direct costs of P1 and P2 are $180,000 and $300,000, respectively. Data on standard service hours and number of employees are as follows:

A1

A2

P1

P2

Standard service hours

100

50

300

150

Number of employees

5

10

45

45

Direct labor hours

500

500

2,500

2,500

Predetermined overhead rates for P1 and P2 are based on direct labor hours. What is the overhead rate for P2 assuming the direct method is used?

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