The market for at home exercise equipment has exploded! We are hired by Peloton to examine costs. In looking at production, we see that Peloton has 2 Support Departments, and 2 Production Departments.

Support Department 1 has $200,000 in costs distributed to it. Costs from Support Department 1 will be allocated to other departments based on labor hours.

The Direct Labor Hours are as follows:

Support Department 1 20

Support Department 2 50

Production Department 1 75

Production Department 2 25

A: Using the direct method for support department cost allocation, how much of Support Department 1s costs will be allocated to Production Department 1? First calculate the percentage and then the dollar amount. Remember here, we directly plop the costs to the other departments.

B: Using the direct method for support department cost allocation, how much of Support Department 1s costs will be allocated to Production Department 2? First calculate the percentage and then the dollar amount. Remember here, we directly plop the costs to the other departments.