WQ7 (12 points) Walter White, Inc., a chemical supply manufa…
WQ7 (12 points) Walter White, Inc., a chemical supply manufacturer, has two operating departments- corporate sales and consumer sales- and two support departments- legal services and quality assurance. Walter white uses number of employees to allocate legal services costs and processing time to allocate quality assurance costs. Support Departments Operating Departments Legal Services Quality Assurance Consumer Sales Corporate Sales Budgeted costs incurred before any interdepartmental cost allocations $100,000 $200,000 Support work supplied by legal services department Budgeted number employees – 100 220 180 Support work supplied by quality assurance department Budgeted processing time (in minutes) 625 – 300 1,575 Allocate the support departments’ costs to the operating departments using the following methods. NOTE: if needed, round to the nearest cent when solving. 1. Direct method. (1 point) The total support department costs allocated to consumer sales is (1 point) The total support department costs allocated to corporate sales is 2. Step-down method (allocate Quality Assurance first). (2 points) The total support department costs allocated to consumer sales is (2 points) The total support department costs allocated to corporate sales is 3. Reciprocal method. (3 points) The total support department costs allocated to consumer sales is (3 points) The total support department costs allocated to corporate sales is