Use the direct method and the sequential method for assigning Support Department Costs

MedServices Inc. is divided into two operating departments: Laboratory and Tissue Pathology. The company allocates delivery and accounting costs to each operating department. Delivery costs include the costs of a fleet of vans and drivers that drive throughout the state each day to clinics and doctors' offices to pick up samples and deliver them to the centrally located laboratory and tissue pathology offices. Delivery costs are allocated on the basis of number of samples. Accounting costs are allocated on the basis of the number of transactions processed. No effort is made to separate fixed and variable costs; however, only budgeted costs are allocated. Allocations for the coming year are based on the following data:

(Appendix 48) Support Department Cost Allocation each opersting department. Delvery eosts indude the costs of a fleet of vans and drvers that drve throughout the state ench day to cinirs a MedServices Ine. is divided into two operating departments: Laborstory and Tisue Pathology. The company allocates delvery and serounting costs t d doctors' offces to pick the baxis of the number of transactions precessed. in m.de to secarate frred and variable costs: hovever, anly psamples and deliver them to the centrally located laboratory and tissue pathology offices. Delivery coats ar allecated on the basis of number of sample. Accounting costs are allocatwd thhe remng vNr ae baasd on the follgwing dela: budowted cuats are ellacaleud. Alerations fr Support Departments Opersting Departments Delivery Accounting Laboratory Pathology Overhead costs $456.000 $240.000 $270.000 $343,000 Number samples 70.200 46.800 Transactions processed 13,300 2.000 24,700 Required: 1. Asign the aupuort denariment ensts bu using the dirwct method. Carry out llocation Laborntory Pathology Proportion of Number of samples Transactions processed Dirct coats Delivery Accounting Total 2. Agsign the sucoort department costs by using the sequential method, allocsting sccounting costs first. Carry the allocation ratios out to four decimal places, if required. Use a minus sign to indicate a subtraction. For those boxes in which no entry is required, leave the bax blank or enter zero ("o" Dulivery Accounting Laburatery Pathology Transactions raties Number of samples ratios Direct costs Accounting Delvery Total (Appendix 48) Support Department Cost Allocation each opersting department. Delvery eosts indude the costs of a fleet of vans and drvers that drve throughout the state ench day to cinirs a MedServices Ine. is divided into two operating departments: Laborstory and Tisue Pathology. The company allocates delvery and serounting costs t d doctors' offces to pick the baxis of the number of transactions precessed. in m.de to secarate frred and variable costs: hovever, anly psamples and deliver them to the centrally located laboratory and tissue pathology offices. Delivery coats ar allecated on the basis of number of sample. Accounting costs are allocatwd thhe remng vNr ae baasd on the follgwing dela: budowted cuats are ellacaleud. Alerations fr Support Departments Opersting Departments Delivery Accounting Laboratory Pathology Overhead costs $456.000 $240.000 $270.000 $343,000 Number samples 70.200 46.800 Transactions processed 13,300 2.000 24,700 Required: 1. Asign the aupuort denariment ensts bu using the dirwct method. Carry out llocation Laborntory Pathology Proportion of Number of samples Transactions processed Dirct coats Delivery Accounting Total 2. Agsign the sucoort department costs by using the sequential method, allocsting sccounting costs first. Carry the allocation ratios out to four decimal places, if required. Use a minus sign to indicate a subtraction. For those boxes in which no entry is required, leave the bax blank or enter zero ("o" Dulivery Accounting Laburatery Pathology Transactions raties Number of samples ratios Direct costs Accounting Delvery Total