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:

Required:
1. Assign the support department costs by using the direct method.
2. Assign the support department costs by using the sequentialmethod.

Support DepartmentsProducing Departments Delivery Accounting Laboratory Pathology $456,000 46,800 13,300 $240000 $270,000 Overhead costs Number of samples Transactions processed $345,000 70,200 24,700 2,000 200