Best Books, an online book retailer, has two operating divisions$-$corporate sales and consumer sales$-$and two support divisions$-$human resources and information systems. Each sales division conducts merchandising and marketing operations independently. Best Books uses number of employees to allocate human resources costs and processing time to allocate information systems costs. The controller of Best Books reads a widely used textbook that states "the reciprocal method is conceptually the most defensible." He seeks your assistance. The following data are available for September.

View the data. View the direct allocation data.

View the step$-$down allocation data.

Read the requirements.

Requirement $1.$ Describe the key features of the reciprocal method.

The reciprocal allocation method explicitly includes the mutual services provided among all support departments. Interdepartmental relationships are fully incorporated into the support department cost allocations.

Requirement $2.$ Allocate the support divisions' costs $($human resources and information systems$)$ to the two operating divisions using the reciprocal method.

Before we can allocate the support divisions' costs to the two operating divisions using the reciprocal method, first determine the linear equations for each support division. Then, solve for HR $($human resources$)$ first and then IS $($information systems$),$ so that you may complete the allocation of the support divisions' costs. $($Round the dollar amounts to the nearest whole dollar. Enter the proportions to five decimal places.$)$

Data

$\backslash$table$[[,$Support Divisions,Operating Divisions,Total$],[,$L$,$HR$,$Info. Systems,Corporate,Consumer$],[,$$$,66,000,237,000,994,000$$$,$$$488,000$$$,1,785,000$