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Use the following information to answer questions 1 through 3: A company has two service departments (S1 and S2) and two manufacturing divisions (M1 and
Use the following information to answer questions 1 through 3: A company has two service departments (S1 and S2) and two manufacturing divisions (M1 and M2). The following information is available. Percent Allocable to Costs Service Incurred Department $290,000 s1 500,000 S2 S1 - 50% S2 20% - M1 M2 30% 50% 20% 30% Using the direct method, what proportion of Sl's costs will be allocated to M2? a. 20% b. 37.5% c. 50% d. 62.5% 2. Using the direct method, how much of the service department costs will be allocated to M1? a. $195,250 b. $205,750 c. $308,750 d. $326,450 3. Using the step method (S2 goes first) how much of the service department costs will be allocated to M1? a. $243,000 b. $265,700 c. $295,400 d. $302,500
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