6.6 Return to the direct method of cost allocation and use the same cost drivers as specied in Problem 6.4 for General Administration and Facilities.

However, assume that $2,000,000 of Financial Services costs are related to billing and managerial reporting and $1,000,000 are related to payroll and personnel management activities.

a. Devise and implement a cost allocation scheme that recognizes that Financial Services has two widely different functions.

b. Is there any additional information that would be useful incompleting Part a? c. What are the costs and benets to St. Benedicts of creating two cost pools for Financial Services?