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Compton Information Services, Inc., has two service departments: human resources and billing. Compton's operating departments, organized according to the special industry each department serves, are

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Compton Information Services, Inc., has two service departments: human resources and billing. Compton's operating departments, organized according to the special industry each department serves, are health care. retail. and legal services. The billing department supports only the three operating departments. but the human resources department supports all operating departments and the billing department. Other relevant information follows. Human Health Legal Resources Billing Care Retail Services Number of employees 18 28 88 68 48 Annual cost* $729,999 $1,429,999 $6,666,668 $4,899,999 $2,866,668 Annual revenue $9,666,688 $6,266,688 $4,866,688 l 'This is the operating cost before allocating service department costs. Required 9. Allocate service department costs to operating departments. assuming that Compton adopts the step method. The company uses the number of employees as the base for allocating human resources department costs and department annual revenue as the base for allocating the billing department costs. It}. Allocate service department costs to operating departments. assuming that Compton adopts the direct method. The company uses the number of employees as the base for allocating the human resources department costs and department annual revenue as the base for allocating the billing department costs. c. Compute the total allocated cost of service centers for each operating department using each allocation method. Complete this question by entering your answers in the tabs below. Req A1 Req A2 Req B1 Req B2 Req C1 Req C2 Allocate service department costs to operating departments, assuming that Compton adopts the direct method. The company uses the department annual revenue as the base for allocating the billing department costs. (Round "Allocation rate" to 4 decimal places.) Department Allocation Weight of Allocated Rate X Base Cost Health Care $ 7,933.0000 X X $ 80 X = $ 634,640 Retail 7.0000 X X 60 X 420 Legal Services X 40 X = 0 Total $ 635,060Complete this question by entering your answers in the tabs below. Req A1 Req A2 Req B1 Req B2 Req C1 Req C2 Compute the total allocated cost of service centers for each operating department using direct method. Department Human Total Resources Billing Allocated Cost Health Care $ 320,000 + $ 634,667 X = 954,667 Retail 240,000 + 476,000 X 716,000 Legal Services 160,000 + 317,333 X 477,333 Total $ 2,148,000

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