Allocate service department costs using reciprocal method.

Service Department	Costs ($)	Allocation Basis
HR	$80,000	Square footage
IT	$60,000	Number of users
Admin	$50,000	Percentage of revenue

Requirements:

Allocate service department costs using the reciprocal method.

Discuss the advantages and disadvantages of the reciprocal method compared to the direct and step-down methods.

Analyze how accurate cost allocation can enhance decision-making in the retail industry.