Question
E-books, an online book retailer, has two operating departments- Corporate Sales and Consumer Sales- and two support departments- Human Resources and Information Systems. Each sales
E-books, an online book retailer, has two operating departments- Corporate Sales and Consumer Sales- and two support departments- Human Resources and Information Systems. Each sales department conducts merchandising and marketing operational independently. E-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 2009: &nbs p; SUPPORT OPERATING Budgeted costs incurred before any interdepartment cost allocation Human Resources $72,700 Information Systems $234,000 Corporate Sales $998,270 Consumer Sales $489,860 Support work supplied by Human Resources Department - Budgeted number of employees 21 42 28 Support work supplied by Information Systems Department -- Budgeted processing time (in minutes) 320 -- 1,920 1,600 Required: 1. Allocate the support departments costs to the operating departments using the direct method. 2. allocate the support depatments costs to the operating departments based on the step-down method. 3. How could you have ranked the support departments differently?
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