Support-department cost allocations; direct, step-down, and reciprocal methods. Ballantine Corporation has two operating departments: Eastern Department...

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Support-department cost allocations; direct, step-down, and reciprocal methods. Ballantine Corporation has two operating departments: Eastern Department and Western Department. Each of the operating departments uses the services of the company's two support departments: Engineering and Information Technology. Additionally, the Engineering and Information Technology departments use the services of each other. Budgeted data are as follows: Budgeted overhead costs before any interdepartment cost allocations Support work furnished: By Engineering Budgeted Engineering salaries. Percentage By Information Technology Eastern = Budgeted IT service hours Percentage Using the DIRECT method: Eastern = Western = Western = Using the Step-Down method: Eastern = Support Departments Western = Using the Reciprocal method: Information Engineering Technology $300,000 $250,000 450 15% $60,000 30% Operating Departments Western Eastern Department Department Total $650,000 $920,000 $2,120,000 $50,000 25% 1,500 50% Required: 1. Using an Excel spreadsheet, complete a support department allocation to determine the total overhead costs of the operating departments (Eastern and Western) after the support- department costs of Engineering and Information Technology have been allocated using (a) the direct method, (b) the step-down method (allocate Engineering first), and (c) the reciprocal method? 2. Which method would you recommend that Ballantine Corporation use to allocate service- department costs? Why? $90,000 45% Question: Total Budgeted Overhead of the Eastern and Western Operating Departments AFTER support department costs have been allocated using the (1) direct, (2) step-down, and (3) reciprocal methods. Round to the nearest Dollar. 1,050 35% $200,000 100% 3,000 100% Support-department cost allocations; direct, step-down, and reciprocal methods. Ballantine Corporation has two operating departments: Eastern Department and Western Department. Each of the operating departments uses the services of the company's two support departments: Engineering and Information Technology. Additionally, the Engineering and Information Technology departments use the services of each other. Budgeted data are as follows: Budgeted overhead costs before any interdepartment cost allocations Support work furnished: By Engineering Budgeted Engineering salaries. Percentage By Information Technology Eastern = Budgeted IT service hours Percentage Using the DIRECT method: Eastern = Western = Western = Using the Step-Down method: Eastern = Support Departments Western = Using the Reciprocal method: Information Engineering Technology $300,000 $250,000 450 15% $60,000 30% Operating Departments Western Eastern Department Department Total $650,000 $920,000 $2,120,000 $50,000 25% 1,500 50% Required: 1. Using an Excel spreadsheet, complete a support department allocation to determine the total overhead costs of the operating departments (Eastern and Western) after the support- department costs of Engineering and Information Technology have been allocated using (a) the direct method, (b) the step-down method (allocate Engineering first), and (c) the reciprocal method? 2. Which method would you recommend that Ballantine Corporation use to allocate service- department costs? Why? $90,000 45% Question: Total Budgeted Overhead of the Eastern and Western Operating Departments AFTER support department costs have been allocated using the (1) direct, (2) step-down, and (3) reciprocal methods. Round to the nearest Dollar. 1,050 35% $200,000 100% 3,000 100%

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1 Direct method Eastern Western Step method Eastern Western Reciprocal method Eastern Western Workin... View the full answer