Trinity Medical Clinic has two support departments and two revenue-producing departments. The controller for the clinic has decided to use the reciprocal method to allocate the costs of the support departments (A and B) to the producing departments (C and D). She has prepared the following cost equations for the two support departments. A equals the total cost for the first support department, and B equals the total cost for the second support department.

A = $35,000 + 0.30B

= $40,000 + 0.20A Before the controller was able to complete the allocation, she had to leave to take care of an emergency. In addition to these equations, she left a hastily scribbled note indicating that Department C uses 20 percent of A’s output and 40 percent of B’s output.

Required:

Allocate the costs of the two support departments to each of the two producing departments using the reciprocal method. lop8