Dunedin Bank has two operating departments $($Retail and Commercial$)$ and three service departments: Operations, Information Technology $($IT$),$ and Transactions. For the last period, the following costs and service department usage ratios were recorded:

Supplying Department Using Department

Transactions IT Operations Retail Commercial

Transactions $00070\%30\%$

IT $10\%040\%30\%20\%$

Operations $60\%0010\%30\%$

Direct cost $ $440,000$ $ $860,000$ $ $1,700,000$ $ $3,900,000$ $ $2,450,000$

Required:

a$.$ Allocate the service department costs to the two operating departments using the reciprocal method.