Betty's Book and Music Store has two service departments, Warehouse and Data Centre. Warehouse Department costs of $175,000 are allocated on the basis of budgeted warehouse-hours. Data Centre Department costs of $75,000 are allocated based on the number of computer log-on hours. The costs of operating departments Music and Books are $125,000 and $150,000, respectively. Data on budgeted warehouse-hours and number of computer log-on hours are as follows:

Complete the following in the different methods indicated in part a, b, and c:

Assign the support department costs to the production departments using

1. The Direct Method
2. The Step-Down Method assigning the Warehouse Department first
3. The Step-Down Method assigning the Data Centre Department first

Production Departments Music Books Support Departments Warehouse Data Centre Department Department Budgeted costs $175,000 $75,000 Budgeted warehouse- N/A 250 hours Number of computer 100 N/A hours $125,000 500 $150,000 750 400 500