(Appendix 4B) Support Department Cost Allocation 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: Support Departments Operating Departments Delivery Accounting Laboratory Pathology Overhead costs $240,000 $270,000 - $456,000 46,800 Number of samples $345,000 70,200 24,700 - 2,000 Transactions processed 13,300 Required: 1. Assign the support department costs by using the direct method. Carry out allocation ratios to two decimal places, if required. Laboratory Pathology Proportion of: Number of samples Transactions processed Direct costs Delivery Accounting Total 2. Assign the support department costs by using the sequential method, allocating accounting costs first. Carry the allocation ratios out to four decimal places, if required. Use a minus sign to indicate a subtraction. For those boxes in which no entry is required, leave the box blank or enter zero ("0"). Delivery Accounting Laboratory Pathology Transactions ratios Number of samples ratios Direct costs Accounting: Delivery: Total