). Now, we start looking at our competitors cost structure as a benchmark. We learn that Nordic Track allocates support costs using the sequential method.

Nordic Track also has 2 support departments and 2 production departments. Support Department 1 has $500,000 in costs distributed to it. Costs from Support Department 1 will be allocated to other departments based on machine hours. Support Department 2 has $250,000 in costs distributed to it. Costs from Support Department 2 will be allocated to other departments based on square feet. Production Departments 1 and 2 have $1,000,000 and $1,200,000 in costs distributed to them, respectively. Costs are allocated using the sequential method, allocating Support Department 1 costs first. Here is a summary table for you:

Support Support Production Production

Dept 1 Dept 2 Dept 1 Dept 2

Machine Hours 200 1,000 10,000 14,000

Square Feet 800 650 1,000 4,000

Department Costs $500,000 $250,000 $1,000,000 $1,200,000

1. How much of Support Department 1s costs will be allocated to Support Department 2? Calculate first in a percentage, and then in dollars.
2. How much of Support Department 1s costs will be allocated to Production Department 1? Calculate first in a percentage, and then in dollars.
3. How much of Support Department 1s costs will be allocated to Production Department 2? Calculate first in a percentage, and then in dollars.