This problem illustrates how costs of two corporate support departments are allocated to operating divisions using a dual-rate method. Fixed costs are allocated using budgeted costs and budgeted hours used by other departments. Variable costs are allocated using actual costs and actual hours used by other departments.

Seth Gross Horizons budgets the following amounts for its two central corporate support departments (legal and personnel) in supporting each other and the two manufacturing divisions, the Laptop Division (LTD) and the Work Station (WSD):

	Legal Department	Personnel Department		LTD	WSD	Total
Budgeted Usage
Legal (hours)	-	250		1,500	750	2,500
Personnel (hours)	2,500	-		22,500	25,000	50,000
Actual Usage
Legal (hours)	-	400		400	1,200	2,000
Personnel (hours)	2,000	-		26,600	11,400	40,000
Budgeted fixed Overhead	$360,000	$475,000		-	-	$835,000
Actual variable Overhead	$200,000	$600,000		-	-	$800,000

Required:

1. What amount of support-department costs for legal and personnel will be allocated to LTD and WSD using (a) the direct method, (b) the step-down method, and (c) the reciprocal method? Must be done in Excel.

2. Comment on your results.