3-32 (a) P1 P2

30 30
S1: $300,000   $150,000 $300,000   $150,000
30  30 30  30

50
25 $300,000   $200,000
S2: $300,000   $100,000 25  50
25  50
$250,000 $350,000

(b) S1 S2 P1 P2
Directly
identified $300,000  $300,000 
Allocation of
S1 costs ($300,000) 120,000  $90,000 $90,000
Allocation of
S2 costs             (420,000) 140,000 280,000
Totals $0 $0 $230,000 $370,000

(c) S1  $300,000  0.25S2

S2  $300,000  0.4S1

Therefore,
S1  $300,000  0.25$300,000  0.4S1
 $375,000  01
. S1
0.9S1  $375,000
$375,000
S1   $416,667
0.9
S2  $300,000  0.4  $416,667  $466,667
Allocation of S1 and S2 costs to P1 and P2

P1 P2
S1: $416,667 ´ 30% $125,000 $416,667 ´ 30% $125,000
S2: $466,667 ´ 25% $116,667 $466,667 ´ 50% $233,333
$241,667 $358,333

The summary below incorporates the allocation of 0.25 × S2 =

$116,667 to S1 and 0.4 × S1= $166,667 to S2.

S1 S2 P1 P2
Directly identified $300,000  $300,000 

Allocation of S1 costs (416,667) 166,667  $125,000 $125,000

Allocation of S2 costs 116,667  (466,667) 116,667 233,333

Total $0 $0 $241,667 $358,333