Problem 1

Samsung has two operating/user departments, Gen 4 & Gen 5. The two support departments are Information Technology (IT) & Product Development (PD). The costs incurred in each of these departments are as follows:

Gen 4	$300,000
Gen 5	$480,000
IT	$60,000
PD	$150,000

The actual level of support is as follows:

Supplied by	Used by
	IT	PD	Gen 4	Gen 5
IT		10%	30%	60%
PD	20%		25%	55%

Determine the cost allocated to:

1. Gen 4 using the direct method
2. Gen 5 using the direct method
3. Gen 4 using the step-down method (allocating IT first)
4. Gen 4 using the step-down method (allocating PD first)
5. Gen 4 using the reciprocal method
6. Gen 5 using the reciprocal method