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Lhamo Tatenda Lawfirm has two support departments, Administration and Info Tech, and two revenue departments, Civil and Contract. All costs are regarded as strictly variable. Administration allocates cost based on number of employees and Info Tech allocates cost based on service hours. For April, the following is available:
	Support Departments			Revenue Departments
	Administration	Info Tech		Civil	Contract
Direct Costs	$ 84,000	$ 35,000		$ 135,000	$ 75,000
Actual Activity:
Employees		6		12	6
Service Hours	192			576	192
REQUIRED:
1. If the company uses the direct method for allocating support department costs to revenue departments, what is the total cost allocated to Civil? What is the total cost allocated to Contract?
2. Assume the company uses the step method for allocating support department costs to revenue departments. The company begins with allocating the Administration Department cost first. What is the total cost allocated to Civil? What is the total cost allocated Contract?
3. Assume the company uses the algebraic (reciprocal) method for allocating support department costs to revenue departments. What are the equations that will determine the total cost of the support departments?

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