1. Comparison of Methods of Allocation

   Duweynie Pottery, Inc., is divided into two operating divisions: Pottery and Retail. The company allocates Power and General Factory department costs to each operating division. Power costs are allocated on the basis of the number of machine hours and general factory costs on the basis of square footage. No effort is made to separate fixed and variable costs; however, only budgeted costs are allocated. Allocations for the coming year are based on the following data: Use the rounded values for subsequent calculations.

   	Support Departments				Operating Divisions
   	Power		General Factory		Pottery		Retail
   Overhead costs	$150,000		$162,000		$96,000		$57,000
   Machine hours	2,000		2,500		7,000		3,000
   Square footage	2,500		1,700		4,000		6,000

   Round all allocation ratios to four significant digits. Round all allocated amounts to the nearest dollar.

   Required:

   1. Allocate the support service costs using the direct method.

   Note: Input to two decimal places.

   Allocation Ratios	Pottery	Retail
   Proportion of machine hours
   Proportion of square footage

   Cost Allocations	Pottery	Retail
   Power	$	$
   General Factory
   Direct costs
   	$	$

   2. Allocate the support service costs using the sequential method. The support departments are ranked in order of highest cost to lowest cost.

   Note: If an amount is zero, enter "0". Input to two decimal places.

   Allocation Ratios	Power	General Factory	Pottery	Retail
   Machine hours	0	0	0.7	0.3
   Square footage	0.2	0	0.32	0.48

   Cost Allocations	Power	General Factory	Pottery	Retail
   Direct costs	$ 150,000	$ 162,000	$ 96,000	$ 57,000
   General Factory
   Power
   Cost after allocation	$ 0	$ 0	$	$

   3. Allocate the support service costs using the reciprocal method.

   Note: If an amount is zero, enter "0". Input to two decimal places.

   Allocation Ratios	Power	General Factory	Pottery	Retail
   Machine hours	0
   Square footage		0

   Cost Allocations	Pottery	Retail
   General Factory	$	$
   Power
   Direct costs	96,000	57,000
   Cost after allocation	$	$