Problem - Support Dept Cost Allocation
Stark Industries has two support departments, Administration and Janitorial, and two revenue departments, Technology and Protection. All costs are regarded as strictly variable. For November, the following is available:
	Support Departments		Revenue Departments
	Administration	Janitorial		Technology	Protection
Direct Costs	$ 84,000	$ 35,000		$ 135,000	$ 75,000
Actual Activity:
Employees		6		12	6
Service Hours	192			576	192
REQUIRED:
1. If the company uses the direct method for allocating support department costs to revenue departments, what is the total cost allocated to Technology? What is the total cost allocated to Protection?
2. Assume the company uses the step method for allocating support department costs to revenue departments. The company begins with allocating the Administration Department cost first. What is the total cost allocated to Technology? What is the total cost allocated Protection?
3. Assume the company uses the algebraic (reciprocal) method for allocating support department costs to revenue departments. What are the equations that will determine the total cost of the support departments?