Eagle's Crest Design is an interior design firm that specializes in hotel interior decorating. The design firm
Question:
Eagle's Crest Design is an interior design firm that specializes in hotel interior decorating. The design firm consists of two distinct services: Sketching and Installation. There are also support functions for the Eagle's Crest Design that are separated into two departments: Office and Technology Support. Office encompasses all the expenses associated with the office support necessary to run the business. Technology Support includes any expenses associated with the computer systems required to operate the business as well as those used to sketch and install the designs. Cost data for the services and the support functions are as follows:
| Technology Support | $21,000 |
| Office | $16,000 |
| Sketching | $46,695 |
| Installation | $60,305 |
| Total | $144,000 |
The Office and Technology Support costs are allocated based on the service hours. The departments receive the following percentage of service hours from the departments:
| Department rendering service | Technology Support | Office | Sketching | Installation |
| Technology Support | -- | 15% | 45% | 40% |
| Office | 40% | -- | 25% | 35% |
Eagle's Crest Design is an interior design firm that specializes in hotel interior decorating. The design firm consists of two distinct services: Sketching and Installation. There are also support functions for the Eagle's Crest Design that are separated into two departments: Office and Technology Support. Office encompasses all the expenses associated with the office support necessary to run the business. Technology Support includes any expenses associated with the computer systems required to operate the business as well as those used to sketch and install the designs. Cost data for the services and the support functions are as follows:
| Technology Support | $21,000 |
| Office | $16,000 |
| Sketching | $46,695 |
| Installation | $60,305 |
| Total | $144,000 |
The Office and Technology Support costs are allocated based on the service hours. The departments receive the following percentage of service hours from the departments:
| Department rendering service | Technology Support | Office | Sketching | Installation |
| Technology Support | -- | 15% | 45% | 40% |
| Office | 40% | -- | 25% | 35% |
QUESTION: using the step-down method, where you allocate costs of the tech support department first, what is the amount of total costs (from both service departments) allocated to sketching?
Please show working. thank you very much!
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