Allocate the service department costs to the operating departments using the direct method.

Chieftan Enterprises has two service departments, Tech Support and Cafeteria, and two operating departments, Production 1 and Production 2. Tech Support costs are allocated to each department on the basis of number of computers, and Cafeteria costs are allocated to each department on the basis of number of employees. This period, Tech Support had costs of $540,360, and Cafeteria had costs of $900,600. Cost allocation base usage was as follows:

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Tech Support Cafeteria Production 1 Production 2 Computers Employees 1 3 4 5 100 20 1000 900