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Alka Seltzer uses the Direct Method to allocate support department costs. The Service Departments are HR and Custodial services. Production Departments are Fabrication and Assembly.

Alka Seltzer uses the Direct Method to allocate support department costs. The Service Departments are HR and Custodial services. Production Departments are Fabrication and Assembly. Initial cost distributions to each department are as follows: HR = $240,000; Custodial = $620,000; Fabrication = $1,400,000 and Assembly = $890,000.

HR Custodial Fabrication Assembly

Square feet 600 1,000 5,000 3,000

People 8 15 30 22

Alka Seltzer uses number people as cost driver for HR and square footage for Custodial costs. What will be the total costs for the Assembly Department after all service department costs are allocated?

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