An online book retailer, has two operating divisionslong dashcorporate sales and consumer saleslong dashand two support divisionslong dashhuman resources and information systems. Each sales division conducts merchandising and marketing operations independently. Upper I dash books uses number of employees to allocate human resources costs and processing time to allocate information systems costs. The following data are available for September.

 

Part $1$

Requirement $1.$ Allocate the support divisions' costs to the operating divisions using the direct method. $($Remember to round to seven decimals when calculating your percentages. Round your final answers to the nearest whole dollar. Use parentheses or a minus sign when decreasing divisions by allocating costs. Complete all answer boxes. For amounts with a $$0$ balance, make sure to enter$"0"$ in the appropriate field.$)$

Support Divisions

Operating Divisions

Human Resources

Information Systems

Corporate Sales

Consumer Sales

Total

Costs incurred

Allocation of human resources costs

Allocation of information systems costs

Total budgeted costs of operating divisions

Data

Support Divisions

Operating Divisions

Human Resources

Information Systems

Corporate Sales

Consumer Sales

Budgeted costs incurred before any interdivision cost allocations

$$76,000$

$$233,000$

$$992,000$

$$489,000$

Support work supplied by human resources division

Budgeted number of employees

$22$

$36$

$24$

Support work supplied by information systems division

Budgeted processing time $($in minutes$)$

$390$

$2,090$

$1,700$

 

Required

Allocate the support divisions' costs to the operating divisions using the direct method.

Rank the support divisions based on the percentage of their services provided to other support divisions. Use this ranking to allocate the support divisions' costs to the operating divisions based on the step$-$down method.

How could you have ranked the support divisions differently?