Support Department Allocation (17 points)

Swirl Enterprises has two support departments (S1 and S2) and two producing departments (A and B). The distribution of services by the support departments is as follows:

Services Provided to

Services Provided from S1 S2 A B

S1 - 10% 65% 25%

S2 24% - 50% 26%

Total department costs for the support and producing departments are as follows:

Department S1 S2 A B

Total Costs $ 65,060 100,000 800,000 724,000

Required:

Allocate the costs of the support department to the producing departments (A and B) using the reciprocal method (round to the nearest dollar) and show the amount of total costs for A and B after the allocation. Show all workings including any algebra equations and the distribution of support department costs.