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5. Prodigy Ofce Supplies Ltd. is an online supplier of ofce products. The managers of the operating divisions are assessed on their ability to control
5. Prodigy Ofce Supplies Ltd. is an online supplier of ofce products. The managers of the operating divisions are assessed on their ability to control all overhead costs incurred and allocated to their division. Two service departments, Administration and Technology Services, provide support for Prodigy's operating divisions. Budgeted data forthe coming quarter are provided below: Service departments Operating divisions Technology Corporate Consumer Administration Services Sales Sales Overhead costs $ 375,000 $275,000 $390,000 $ 420,000 Employees 10 40 50 30 Support hours provided 800 400 3,600 2,800 Administration costs are allocated based on the number of employees in the department and Technology Services costs are allocated based on support hours provided. Assuming that Quantum allocated service department costs using the step method with Administration allocated rst, what would be the total budgeted overhead costs on which the Corporate Sales division would be assessed after the service departments' costs allocation
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