Service department cost allocation, direct method San Rafael Company has two production departments, assembly and finishing, and two service departments, machine setup and inspection. Machine setup costs are allocated on the basis of number of setups, whereas inspection costs are allocated on the basis of number of direct labor hours. Selected information on the four departments follows:

Required (a) Using the direct method, determine the amount of machine setup costs allocated to the two production departments. (b) Using the direct method, determine the amount of inspection costs allocated to the two productiondepartments.

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ITEM DIRECT LABOR HOURS DIRECT COSTS NUMBER OF SETUPS Machine setup Inspection Assembly Finishing $40,000 15,000 25,000 20,000 300 200 500 100