Nokia Inc. has two user departments, Wireless Communications & Digital Communications. The two support departments are Technical Support (TS) & Research & Development (R&D). The costs incurred in each of these departments are as follows:
Wireless Communications $110,000
Digital Communications $60,000
TS $80,000
R&D $90,000
The actual level of support is as follows:
Supplied by Used by
TS R&D Wireless Digital
TS 20% 50% 30%
R&D 30% 25% 45%
Determine the cost allocated to:
1. Wireless Communications using the direct method
2. Digital Communications using the direct method
3. Wireless Communications using the step-down method (allocating TS first)
4. Wireless Communications using the step-down method (allocating R&D first)
5. Wireless Communications using the reciprocal method
6. Digital Communications using the reciprocal method