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Answer questions step by step. Also, Add the number on a schedule. Leader Company has two support departments (S1 and S2) and two producing departments

Answer questions step by step. Also, Add the number on a schedule.

  1. Leader Company has two support departments (S1 and S2) and two producing departments (P1 and P2). Estimated direct costs and percentages of services used by these departments are as follows:

Allocation of support departments

S1

S2

P1

P2

S1

-

10%

40%

50%

S2

20%

-

50%

30%

Direct costs

4,500

8,000

10,000

15,000

Required:

a.

Prepare a schedule allocating the support department costs to the producing departments using the direct allocation method.

b.

Prepare a schedule allocating the support department costs to the producing departments using the sequential allocation method.

  1. Describe the differences between support and producing departments. Give two examples of each.

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