Support Department Cost AllocationReciprocal Services Method

Blue Africa Inc. produces laptops and desktop computers. The companys production activities mainly occur in what the company calls its Laser and Forming departments. The Cafeteria and Security departments support the companys production activities and allocate costs based on the number of employees and square feet, respectively. The total cost of the Security Department is $252,000. The total cost of the Cafeteria Department is $778,000. The number of employees and the square footage in each department are as follows:

	Employees		Square Feet
Security Department	10		540
Cafeteria Department	28		2,400
Laser Department	40		3,200
Forming Department	50		2,400

Using the reciprocal services method of support department cost allocation, determine the total costs from the Security Department that should be allocated to the Cafeteria Department and to each of the production departments.

	Cafeteria Department		Laser Department		Forming Department
Security Department cost allocation	$		$		$

Support Department Cost AllocationSequential Method

Snowy River Stallion Inc. produces horse and rancher equipment. Costs from Support Department 1 are allocated based on the number of employees. Costs from Support Department 2 are allocated based on asset value. Relevant department information is provided in the following table:

	Support Department 1		Support Department 2		Production Department 1		Production Department 2
Number of employees	9		7		25		18
Asset value	$1,150		$670		$6,230		$5,100
Department cost	$20,000		$15,500		$99,000		$79,000

Using the sequential method of support department cost allocation, determine the total costs from Support Department 1 (assuming they are allocated first) that should be allocated to Support Department 2 and to each of the production departments.

	Support Department 2		Production Department 1		Production Department 2
Support Department 1 cost allocation	$		$		$

Support Department Cost AllocationDirect Method

Christmas Timber, Inc., produces Christmas trees. The trees are produced through a cutting and pruning process. Machine maintenance and janitorial labors are performed throughout the production process by nonproduction employees. Maintenance and janitorial costs are allocated based on machine hours used and the number of trees in each department, respectively. The company estimates that the cutting and pruning areas typically have about 18 and 72 trees, respectively, in them at 1 time. The company also estimates that the cutting process requires about 9 times as many machine hours as the pruning process. The total costs of each department are as follows:

Maintenance Department	$8,000
Janitorial Department	5,000
Cutting Department	56,000
Pruning Department	12,000

Using the direct method of support department cost allocation, determine the total cost of each production department after allocating all support costs to the production departments.

	Cutting Department		Pruning Department
Production departments total costs	$		$