Fox Company Has Two Support Departments (S1 and S2) and Two

Essay

Fox Company has two support departments (S1 and S2) and two producing departments (P1 and P2). Estimated direct costs and percentages of services used by these departments are as follows: $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$$\text {Used by Department}$
$\begin{array} { c c c c c } \text { Support Dept. } & \underline { \mathrm { S } 1 } & \underline { \mathrm { S } 2 } & \underline { \mathrm { P } 1 } & \underline { \mathrm { P } 2 } \\ \mathrm {~S} 1 & - & 10 \% & 40 \% & 50 \% \\ \mathrm {~S} 2 & 20 \% & - & 50 \% & 30 \% \\ \text { Direct costs } & £ 4,500 & £ 8,000 & £ 10,000 & £ 15,000 \end{array}$

a.Prepare a schedule allocating the support department costs to the producing departments using the direct allocation method.
b.Prepare a schedule allocating the support department costs to the producing departments using the sequential allocation method.