The Josephine Company has 4 departments in its factory consisting of two service departments; S1 and S2,
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Question:
The Josephine Company has 4 departments in its factory consisting of two service departments; S1 and S2, and two production departments; P1 and P2. Each of the production departments produce a single product. The current costs of each department are:
S1$34,000S2$42,000P1$30,000P2$20,000
The distribution and consumption of departments' services is given in the following table:
Service provided to:S1S2P1P2Services provided by:S1-20%40%40%S220%-30%50%
What is the total cost incurred by Department P1 after the allocation of the service department costs on the basis of the step-down method?
Select one:
a.$62,200
b.$63,800
c.$79,441
d.$63,250
e.None of the above
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