Answer:
Department 1 cost Allocation =$99,400
Department 2 cost Allocation=$7,100
Department 3 cost Allocation=$35,500
Explanation:
Calculation for determining the costs from Support Department 1 that should be allocated to each production department using the direct method of support department cost allocation,
The first step is to find the Support department total cost drivers
Using this formula
Support department total cost drivers = Production Department 1 + Production Department 2 + Production Department 3
Let plug in the formula
Support department total cost drivers= 1,400+100+500
Support department total cost drivers = 2,000
Second step is to determine the costs from Support Department 1 that should be allocated to each production department.
Production Department 1
Support Department 1 Allocation
142,000* 1,400/2,000= $99,400
Production Department 2
Support Department 1 Allocation
142,000 * 100/2,000= $7,100
Production Department 3
Support Department 1 Allocation
142,000* 500/2,000= $35,500
Therefore the costs from Support Department 1 that should be allocated to each production department will be :
Department 1 cost Allocation =$99,400
Department 2 cost Allocation=$7,100
Department 3 cost Allocation=$35,500
