Steel Company has two service departments, Labor and Machining, and two production departments, Fabrication and Assembly. 

Required 

(a) Determine the service department costs allocated to the two production departments using the direct method. 

(b) Determine the service department costs allocated to the two production departments using the sequential method beginning with the allocation of Labor Department costs.

(c) Determine the service department costs allocated to the two production departments using the reciprocal method.  

Transcribed Image Text:

Direct costs Labor service units provided...... Machining service units provided... LABOR MACHINING FABRICATION ASSEMBLY TOTAL $275,000 $600,000 $75,000 $1,200,000 1,800 2,800 160 800 500 40 $250,000 1,100 2,300 6,200 3,300