E-books, an online book retailer, has two operating departments-corporate sales and consumer salesand two support departments-human resources and information systems. A (Click the icon to view additional information.) ) The following data are available for September 2017: (Click the icon to view the data.) (Click the icon to view the direct allocation data.) (Click the icon to view the step-down allocation data.) . Read the requirements Requirement 2. Allocate the support departments' costs (human resources and information systems) to the two operating departments using the reciprocal method. . Before we can allocate the support departments' costs to the two operating departments using the reciprocal method, let's first determine the linear equations for each support department. Then off-line solve for HR and IS (Information Systems), so that you may complete the allocation of the support departments' costs. (Abbreviations used:HR = human resources: IS = information system.) HR= Data Table Requirements IS= + Now allocate the support departments' costs (human resources and information systems) to the two operating departments using the reciprocal method. (Round proportions to five decimal hus sign when decreasing Support Departments Operating Departments Support Deparments Operating Departments 1. Describe the key features of the reciprocal method. 2. Allocate the support departments' costs (human resources and information Human Information Corporate Consumer HR Info. Systems Corporate Consumer Total systems) to the two operating departments using the reciprocal method. Use Resources Systems Sales Sales (a) linear equations and (b) repeated iterations. Budgeted costs incurred before any Costs incurred 3. In the case presented in this exercise, which method (direct, step-down, or interdepartment cost allocations S 72,700 S 234,400 $ 998,270 $ 489,860 Allocation of HR costs reciprocal) would you recommend? Why? Support work supplied by human resources Allocation of Info Systems costs department Budgeted number of employees 21 42 28 Total budgeted costs of operating departments Print Done Support work supplied by information systems department This time, use repeated iterations. (Round proportions to five decimal places, XXXXX, and your final answers to the nearest whole dollar. Use parentheses or a minus sign when decreasing deparmens by allocauig COSS. Enter av for any zero balances. Note tilat Tour (, omg merences may occur in the to Budgeted processing time (in minutes) 320 1.920 1.600 Support Departments Operating Departments Reciprocal Method HR Info. Systems Corporate Consumer Total Print Done Budgeted overhead costs i Direct allocation data before interdepartment cost allocations First allocation of HR costs Support Departments Operating Departments 0 Step-down allocation data First allocation of Info. Systems costs HR Info. Systems Corporate Consumer Total Second allocation of HR costs Costs incurred $ 72,700 $ 234,400 $ 998.270 S 489,860 $ 1,795,230 Operating Departments 43,620 Allocation of HR costs (72,700) Second allocation of Info. Systems costs Support Departments 29,080 (234.400) 127,853 108.547 HR Info Systems Corporate Consumer Total Third allocation of HR costs Allocation of Info. Systems costs $ 0$ O $ 1,169,743 S 625,487 $ 1,795,230 Costs incurred $ 72,700 $ 234,400 $ Third allocation of Info. Systems costs 998,270 $ 489,860 $ 1,795,230 Total budgeted costs of operating departments Allocation of HR costs (72.700 16,777 33,554 Fourth allocation of HR costs 22,369 S 0 Fourth allocation of Info Systems costs 251, 177 Print Done (251,177) Allocation of Info. Systems costs 137,006 114, 173 Total budgeted overhead of operating departments $ 0 $ 1,168,830 $ 626,402 $ 1,795,230 Requirement 3. In the case presented in this exercise, which method (direct, step-down, or reciprocal) would you recommend? Why? Total budgeted costs of operating departments *Proportions for services provided to other support departments: human resources (HR), 0.23077; information sytems (IS), Recommendation: The because it is more accurate than the other two methods when there are mutual relationships among support departments. 0.08333 Why would you recommend this method? Print Done Choose from any list or enter any number in the input fields and then continue to the next