The company is considering three different methods of allocating overhead costs: the direct method, the sequential method, and the reciprocal method.

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Computer Information Services is a computer software consulting company. Its three major functional areas are P1: computer programming, P2: information systems consulting, and P3: software training. The budgeted overhead costs will be used as a guide in pricing a new contract. The company is considering three different methods of allocating overhead costs: the direct method, the sequential method, and the reciprocal method. Usage data was assembled on overhead from its two service departments, S1: Information Systems Department and S2: Facilities Department.

S1 S2 P1 P2 P3
Budgeted Overhead $50,000(s1)$25,000(s2)$75,000(p1)$110,000(p2)$85,000(p3)

S1: hours of computer use 400(S2)1,100(P1)600(p2) 900(p3)
S2: Square Feet 200(S1) 400(p1)600(p2)800(p3)

a. Allocate the service department costs to the user departments using the direct method.

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