Toys R Us has two operating/user departments, Gen 1 & Gen 2. The two support departments are Information Technology (IT) & Product Development (PD). The costs incurred in each of these departments are as follows:

Gen 4 $300,000 Gen 5 $480,000 IT $60,000 PD $150,000

The actual level of support is as follows:

Supplied by Used by IT PD Gen 1

Gen 2 IT 10% 30% 60% PD 20% 25% 55%

Determine the cost allocated to:

1. Gen 1 using the direct method