4, E16-22 (book/static) Part 4 of 7 HW Score: 69.21%, 69.21 of 100 points Points: 10.14 of 40 Save E-books, an online book retailer, has two operating departments-corporate sales and consumer sales-and two support departments-human resources and information systems. (Click the icon To view additional information.) The following data are available for September 2020: (Click the icon to view the data.) (Click the icon to view the direct allocation data.) (Click the icon to view the step-down allocation data.) Read the equament before interdepartment cost allocations 72,700 $ First allocation of HR costs 72700 234,400 $ 16,777 (256,102) 998,270 $ 489,860 $1,795,230) 33,554 22,369 First allocation of Info. Systems costs 25610 (25610) 11185 Second allocation of HR costs (25610) 43,620 Second allocation of Info. Systems costs 4362 (43.620) More info Each sales department conducts merchandising and marketing operations independently. E-books uses number of employees to allocate human resources costs and processing time to allocate information systems costs. The controller of E-books reads a widely used textbook that states that "the reciprocal method is conceptually the most defensible." He seeks your assistance. d allocation of HR costs Print Done - C O 489 22 1 Data table A B 2 Budgeted costs incurred before any 3 interdepartment cost allocations Support work supplied by human 4 resources department 5 Budgeted number of employees Support work supplied by information 6 systems department 7 Budgeted processing time (in minutes) ges Calculator SUPPORT D OPERATING E DEPARTMENTS DEPARTMENTS Human Information Resources Systems Corporate Consumer Sales Sales $ 72,700 $ 234,400 $ 998,270 $489,860 0 21 42 28 320 0 1,920 1,600 Print Done - Direct allocation data Costs incurred Allocation of HR costs Allocation of Info. Systems costs Total budgeted costs of operating departments Support Departments HR Info. Systems $ 72,700 $ (72,700) Operating Departments Corporate Consumer Total 234,400 $ 998,270 $ 489,860 $ 1,795,230 43,620 29,080 (234,400) 127,853 106,547 $ 0 $ 0 $ 1,169,743 $ 625,487 $ 1,795,230 Print Done - Step-down allocation data Costs incurred Allocation of HR costs Allocation of Info. Systems costs Support Departments Operating Departments Consumer Total 998,270 $ 489,860 $ 1,795,230 HR Info. Systems Corporate $ 72,700 $ 234,400 $ (72,700) 16,777 33,554 $ 0 251,177 (251,177) 137,006 22,369 114,173 Total budgeted costs of operating departments 0 $ 1,168,830 $ 626,402 $ 1,795,230 *Proportions for services provided to other support departments: human resources (HR), 0.23077; information sytems (IS), 0.08333. - X ar mat Cli Requirements efo 1. Describe the key features of the reciprocal method. 2. Allocate the support departments' costs (human resources and information systems) to the two operating departments using the reciprocal method. Use (a) linear equations and (b) repeated iterations. 3. In the case presented in this exercise, which method (direct, step-down, or reciprocal) would you recommend? Why? - C C