Polonchek Company has two support departments, Human Resources and General Factory, and two producing departments, Fabricating and Assembly.

Required:
1. Calculate the allocation ratios for the four departments using the direct method.
2. Using the direct method, allocate the costs of the Human Resources and General Factory departments to the Fabricating and Assembly departments.
3. What ifthe General Factory Department had 40 employees? How would that affect the allocation of Human Resources Department costs to the Fabricating and Assembly departments?LO1

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Support Departments Producing Departments Human General Resources Factory Fabricating Assembly Direct costs $150,000 $360,000 $125,000 $80,000 Normal activity: Number of employees 60 45 80 Square footage 1,500 6,000 14,000 The costs of the Human Resources Department are allocated on the basis of number of employees, and the costs of General Factory are allocated on the basis of square footage. Polonchek Company uses the direct method of support department cost allocation.