Thermal Corporation has two producing departments and two service departments labeled P1, P2, S1, S2 respectively. Direct costs for each department and the proportion of service costs used by various departments are as follows:

Cost Center	Direct Costs	Proportion of services used by:
		S1	S2	P1	P2
P1	P100, 000
P2	P50, 000
S1	P15, 000	-	60%	30%	10%
S2	P25, 000	10%	-	50%	40%

In calculating predetermined overhead rates, machine hours are used as the base in P1 and direct labor hours as the base in P2

	P1	P2
Machine Hours	50,000	40,000
Direct Labor Hours	40,000	20,000

Requirements:

Allocate the service department costs to operating departments and compute the factory overhead rate for P1 and P2 using the following methods:

1. Direct method
2. Step method start with S1
3. Algebraic method

*Reposting this question again, because it has been answered incorrectly many times.