1. Support Department Cost Allocation Bradley Company has two support departments, Maintenance and Computer Support, and two operating departments, Cutting and Assembly. Maintenance costs are allocated based on the service hours, and computer support costs are allocated based on computer time. Information on service provided by each support department to the other departments and costs for each department for August are given below: Service hours Computer time Costs Support Depts. Maintenance Computer 400 1,000 $80,000 $42,800 Operating Departments Cutting Assembly 1,000 600 3,600 5,400 $120,000 $180,000 Allocate the support department costs to the operating departments using each of the following methods: a. Direct method b. Step-down method (1) Determine which support department should be allocated first. (2) Allocate the support costs. c. Algebraic (reciprocal) method. (1) Set up and solve equations for support department costs. (2) Allocate the support costs. 2. Common Cost Allocation Rick wants to purchase Product A, which costs $100. Jane wants to purchase Product B, which costs $150. They can purchase both products bundled together for $220. How much should each pay under each method below? a. stand-alone method b. incremental method, assuming (1) Rick is the primary party (2) Jane is the primary party