Q3. ADLG Company has two support departments, SS1 and SS2, and two operating departments, OD1 and OD2. The company has decided to use the direct method and allocate variable SS1 dept. costs based on the number of transactions and fixed SS1 dept. costs based on the number of employees. SS2 dept. variable costs will be allocated based on the number of service requests and fixed costs will be allocated based on the number of computers. The following values have been extracted for the allocation: (4 Marks)

	Support Departments	Operating Departments
	SS1	SS2	OD1	OD2
Total Department variable costs	16,000	19,000	105,000	68,000
Total department fixed costs	19,500	34,000	120,000	55,000
Number of transactions	50	55	250	140
Number of employees	18	24	47	38
Number of service requests	37	22	26	32
Number of computers	20	25	31	37

You are required to allocate variable and fixed costs.

(Chapter 8)

ACCT301 Cost Accounting