Concord Inc. manufactures two types of skateboards in two different departments: a basic board and an exclusive model. The plant is highly automated and contains only two other departments: (1) engineering and design and (2) information systems. Concords allocates support department costs according to estimated service use. Estimated information for next year is as follows:

Support Departments Operating Departments Engineering and Design Information Systems Basic Board Exclusive Model Direct costs $42,000 $116,000 $143,000 $330,000 Services used Engineering and design 10% 20% 70% Information systems 20% 30% 50%

Production volume 114,000 63,000

Total allocated costs are assigned to individual units using the production volume. Determine the estimated total allocated costs for the operating departments using the step-down method.

Support Departments Operating Departments Engineering and Design Information Systems Basic Board Exclusive Model

Allocation Bases

Step 1 Information systems

Step 2 Engineering and Design

Direct cost

Allocations:

Step 1 Information systems

Step 2 Engineering and design

Total allocated costs

Determine the estimated total allocated cost per unit of the basic skateboard and the exclusive skateboard using the step-down method, allocating the department with the largest direct costs first. (Round answers to 3 decimal places, e.g. 5.125.)

Basic Board $ Exclusive Board $

Determine the estimated total allocated costs for the operating departments using the reciprocal method. Use either simultaneous equations or Excel Solver.

Support Departments Operating Departments Engineering and Design Information Systems Basic Board Exclusive Model

Allocation Bases

Step 1 Information systems

Step 2 Engineering and Design

Direct cost

Allocations:

Step 1 Information systems

Step 2 Engineering and design

Total allocated costs

Determine the estimated total allocated cost per unit of the basic skateboard and the exclusive skateboard under the reciprocal method. (Round answers to 3 decimal places, e.g. 5.125.)

Basic Board $ Exclusive Board $