Haywood Manufacturing has two production departments- assembly and finishing. These are supported by two service departments-sourcing (purchasing and handling of raw materials and human resources) and operations (work scheduling, supervision, and inspection).

Haywood has the following labor-hours devoted by each of the service departments to the other departments.

 

	Total Labor Hours Used by Dpeartments
	Sourcing	Operations	Assembly	Finishing
Sourcing	0	20,000	35,000	70,000
Operations	12,000	0	48,000	40,000

The costs incurred in the plant are as follows:

Departments Departmental Costs

Sourcing ....... $ 155,000

Operations ...... 222,000

Assembly ........ 387,000

Finishing ....... 466,000

Total ..........$1,230,000

Required

1. What are the costs allocated to the two production departments using (a) the direct method, (b) the step method with the sourcing department going first, and (c) the reciprocal method?

2. What are the total costs in the production departments after allocation?