Seth Corporation allocates the estimated $250,000 of its accounting department cost to its production and marketing departments since the accounting department supports. the other two departments, particularly with regard to payroll and accounts payable functions. The costs will be allocated based on the number of employees using the direct method. Department Employees Accounting 5 Production 42 Marketing 23 How much of the accounting department costs will be allocated to the production department?

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BluStar Company has two service departments, Administration and Accounting, and two operating departments, Domestic and International. Administration costs are allocated on the basis of employees, and Accounting costs are allocated on the basis of number of transactions. A summary of BluStar operations follows.       Administration Accounting   domestic     International   Employees   – 21   36     43   Transactions   32,000 –   21,000     84,000   Department direct costs   360,000 140,000 $ 935,000   $ 3,730,000                       Required: a. Allocate the cost of the service departments to the operating departments using the direct method.b. Allocate the cost of the service departments to the operating departments using the step method. Start with Administration.c. Allocate the cost of the service departments to the operating departments using the reciprocal method.

BluStar Company has two service departments, Administration and Accounting, and two operating departments, Domestic and International. Administration costs are allocated on the basis of employees, and Accounting costs are allocated on the basis of number of transactions. A summary of BluStar operations follows.    Administration Accounting Domestic International Employees   —     25     15     60   Transactions   50,000     —     10,000     40,000   Department direct costs $ 56,000   $ 21,000   $ 155,000   $ 590,000     BluStar estimates that the cost structure in its operations is as follows.     Administration Accounting Domestic International Variable costs $ 22,000   $ 5,800   $ 114,500   $ 429,000   Fixed costs   34,000     15,200     40,500     161,000   Total costs $ 56,000   $ 21,000   $ 155,000   $ 590,000   Avoidable fixed costs $ 10,000   $ 4,000   $ 18,500   $ 110,500     Required: a. If BluStar outsources the Administration Department, what is…

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