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3. Support Department Cost AllocationSequential Method Snowy River Stallion Inc. produces horse and rancher equipment. Costs from Support Department 1 are allocated based on the

3. Support Department Cost AllocationSequential Method

Snowy River Stallion Inc. produces horse and rancher equipment. Costs from Support Department 1 are allocated based on the number of employees. Costs from Support Department 2 are allocated based on asset value. Relevant department information is provided in the following table:

Support Department 1 Support Department 2 Production Department 1 Production Department 2
Number of employees 9 7 25 18
Asset value $1,150 $670 $6,230 $5,100
Department cost $20,000 $15,500 $99,000 $79,000

Using the sequential method of support department cost allocation, determine the total costs from Support Department 1 (assuming they are allocated first) that should be allocated to Support Department 2 and to each of the production departments.

Support Department 2 Production Department 1 Production Department 2
Support Department 1 cost allocation $ $ $

4.

Support Department Cost AllocationReciprocal Services Method

Blue Africa Inc. produces laptops and desktop computers. The companys production activities mainly occur in what the company calls its Laser and Forming departments. The Cafeteria and Security departments support the companys production activities and allocate costs based on the number of employees and square feet, respectively. The total cost of the Security Department is $244,000. The total cost of the Cafeteria Department is $373,000. The number of employees and the square footage in each department are as follows:

Employees Square Feet
Security Department 10 530
Cafeteria Department 26 2,400
Laser Department 40 2,400
Forming Department 50 3,200

Using the reciprocal services method of support department cost allocation, determine the total costs from the Security Department that should be allocated to the Cafeteria Department and to each of the production departments.

Cafeteria Department Laser Department Forming Department
Security Department cost allocation $ $ $

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