Baldwin Enterprises has two service departments, Personnel and Legal, and two operating divisions, Eastern and Western. Personnel costs are allocated on the basis of employees and Legal costs are allocated on the basis of hours. A summary of Baldwin operations follows:

Employees

Personnel

Hours

Department direct costs

$10,800$ $$390,000$

Legal

$40$

Eastern

Western

$120$

$,400$

$,000$

$40$

$$250,000$

$$1,290,000$

$1,800$

$80,000$

Required:

a$.$ Allocate the cost of the service departments to the operating divisions using the direct method.

b$.$ Allocate the cost of the service departments to the operating divisions using the step method. Start with Legal.

c$.$ Allocate the cost of the service departments to the operating divisions using the reciprocal method.

Complete this question by entering your answers in the tabs below.

Required $A$

Required B

Required C

Allocate the cost of the service departments to the operating divisions using the direct method.

Note: Amounts to be deducted should be indicated by a minus sign.

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