Departmental Cost Allocation; Outsourcing Marin Company produces two software products $($Cloud$-$

X and Cloud$-$Y$)$ in two separate departments $($A and B$).$ These products are highly regarded network

maintenance programs. Cloud$-$X is used for small networks and Cloud$-$Y is used for large networks.

Marin is known for the quality of its products and its ability to meet dates promised for software upgrades.

Department A produces Cloud$-$X$,$ and department B produces Cloud$-$Y$.$ The production departments

are supported by two support departments, systems design and programming services. The

sources and uses of the support department time are summarized as follows:

From

To Total

Design Programming Department A Department B Labor Hours

Design $5,0001,0009,00015,000$

Programming $4006001,0002,000$

The costs in the two service departments are as follows:

Design Programming

Labor and materials $($all variable$)$ $$50,000$ $$36,000$

Depreciation and other fixed costs $40,0004,000$

Total $$90,000$ $$40,000$

RequiredDetermine the total support costs allocated to each of the producing departments using the step method $($design department goes first$),$ and the reciprocal method.