At the end of a long day of training, Daniel and Nancy are visiting over one last cup of coffee. The final segment of the training session,

yet to come, is a refresher on support department cost allocation methods. Daniel is thinking of skipping out early, since his company

firmly believes in only one of these methods.

Daniel: I$\text{'}$m telling you, Nancy, the reciprocal method is the only way to go$.$ It's by far the most accurate, and even though it takes

a little bit of set$-$up in Excel $($or something similar$),$ the additional accuracy is worth it$.$

Nancy: Really? At our company we have always used the direct method. We find that it's much easier to explain this approach to

our operating managers, and everyone appreciates the simplicity of it$.$ We use our extra time to perform other

worthwhile analyses for our company. Besides, have you ever really compared your final costs under the reciprocal

method with what they'd be under the direct method? I bet they're not even that different.

Nancy knew that this session was on the schedule for today's training, so she brought her own direct method cost allocations along.

She quickly pulled them out of her bag and showed Daniel the following.