Tarheels Company Has Two Operating Departments P1 And P2 It

Tarheels Company has two operating departments: P1 and P2. It has two service departments: S1 and S2.
Each department’s direct costs are as follows:
P1…………………………………………………………… $180,000
P2…………………………………………………………… 120,000
S1…………………………………………………………… 60,000
S2…………………………………………………………… 80,000
P1, P2, and S2 use S1’s services as follows:
P1……………………………………………………………20 Percent
P2……………………………………………………………20 Percent
S2……………………………………………………………60 Percent
P1 and P2 use S2’s services as follows:
P1……………………………………………………………40 Percent
P2……………………………………………………………60 Percent
Allocate service department costs using the step method. Start by allocating S1 to S2, P1, and P2.

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