Wimbledon Corporation has two production Departments: Assembly and Machining and two service departments: Personnel and Cafeteria. Direct costs for each department and the proportion of service costs used by the various departments for the month of July, 2016 are as follows:

Proportion of Services Used by:

Department Direct costs Personnel Cafeteria Machining Assembly

Personnel $30,000 0.40 0.30 0.30

Cafeteria $50,000 0.20 0.50 0.30

Machining $80,000

Assembly $70,000

Required:

a. Compute the allocation of service department costs to producing departments for July, 2016 using the direct-method.

b. Compute the allocation of costs using the reciprocal method