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1 20 ports Book Problem 7-35 (Algo) Departmental Cost Allocation (LO 7-3] Logan Products has two production departments-assembly and finishing. These are supported by two service departments-sourcing (purchasing and handling of materials and human resources) and operations (work scheduling, supervision, and inspection), Logan has the following labor hours devoted by each of the service departments to the other departments. Total Labor Hours Used by Departments. Assembly 40,000 60,000 Departments Sourcing Operations Assembly Finishing Total Sourcing Sourcing Operations The costs incurred in the plant are as follows: Operations 20,000 10,000 Departmental Costa $ 189,000 245,000 426,000 271,000 151117,000 Required: 1. What are the costs allocated to the two production departments using (a) the direct method, (b) the step method, when the sourcing department that provides the greatest percentage of services to other service departments goes first, and (c) the reciprocal method? 2. What are the total costs in the production departments after allocation? (For all requirements, do not round intermediate calculations. Round your final answers to nearest whole dollar amount.) Tutal Service Finishing 60,000 50,000 Total Production 20 1 Pre The costs incurred in the plant are as follows: Departmental Cont Departments Sourcing Operations Assembly Finishing Total Required: 1. What are the costs allocated to the two production departments using (a) the direct method. (b) the step method, when the sourcing department that provides the greatest percentage of services to other service departments goes first, and (c) the reciprocal method? 2. What are the total costs in the production departments after allocation? (For all requirements, do not round intermediate calculations. Round your final answers to nearest whole dollar amount.) Direct Method Assembly Finishing Shep Method Assembly Finishing Reoprocal Method $ 189,000 245,000 426,000 271,000 F1,131,000 Assembly Finishing Total Service Department Cost Allocated $ Total Production 200,000 $ 224,764 701,750 204,750 635,036 449,527 1,127,750 475,750