Caris Company is a manufacturer with two production departments (Machining and Assembly) as well as two support departments (Materials Requisitions and Utility Services). For the last quarter of 2020, Cariss cost records indicate the following:

SUPPORT PRODUCTION

Materials Requisitions (MR) Utility Services (US) Machining Assembly Total

Budgeted overhead costs before

any interdepartment cost allocations $400,000 $2,000,000 $9,456,000 $13,458,000 $25,314,000

Support work supplied by MR

(Number of requisitions) 0 25% 40% 35% 100%

Support work supplied by US (Power costs) 10% 0 30% 60% 100%

Required

1. Allocate the two support departments costs to the two operating departments using the following method:

a. The Algebraic/reciprocal method