Global Network retailer has two operating unitsCorporate Sales and Consumer Sales, and two support unitsHuman Resources and Information Systems Each sales unit conducts merchandising and marketing operations independently Global Network uses number of employees to allocate Human Resources costs, and processing time to allocate Information Systems costs The following data are available for September 2021 Support units Operating units HR IS Corporate Consumer Budgeted before allocation $ 72,700 $ 234,400 $ 998,270 $ 489,860 Support by HR (budgeted no of employess) 21 42 28 Support by IS (budgeted processing time in minutes) 320 1,920 1,600 Required 1 Allocate the support units costs to the operating units using the direct method 10 marks 2 Rank the support units based on the percentage of their services provided to other support units Use this ranking to allocate the support units costs to the operating units based on the step down method 10 marks 3 Allocate the support units costs (Human Resources and Information Systems) to the two operating units using the reciprocal method 20 marks 4 In the case presented in this exercise, which method (direct, step down or reciprocal) would you recommend Why Global Network retailer has two operating units Corporate Sales and Consumer Sales, and two support units Human Resources and Information Systems Each sales unit conducts merchandising and marketing operations independently Global Network uses number of employees to allocate Human Resources costs, and processing time to allocate Information Systems costs The following data are available for September 2021 Support units Operating units HR IS Corporate Consumer $ $ $ $ 72,700 234,400 998,270 489,860 Budgeted before allocation Support by HR (budgeted no of employess) 21 42 28 Support by IS (budgeted processing time in minutes) 320 1,920 1,600 Required 1 Allocate the support units' costs to the operating units using the 10 marks direct method 2 Rank the support units based on the percentage of their services 10 marks provided to other support units Use this ranking to allocate the support units' costs to the operating units based on the step down method 3 Allocate the support units' costs (Human Resources and Information 20 marks Systems) to the two operating units using the reciprocal method 4 In the case presented in this exercise, which method (direct, step 10 marks down or reciprocal) would you recommend Why

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Global Network retailer has two operating unitsCorporate Sales and Consumer Sales, and two support unitsHuman Resources and Information Systems. Each sales unit conducts merchandising and

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Global Network retailer has two operating unitsCorporate Sales and Consumer Sales, and two support unitsHuman Resources and Information Systems. Each sales unit conducts merchandising and marketing operations independently. Global Network uses number of employees to allocate Human Resources costs, and processing time to allocate Information Systems costs. The following data are available for September 2021:

	*Support units*		*Operating units*
	HR	IS	*Corporate*	*Consumer*
*Budgeted before allocation*	*$ 72,700*	*$ 234,400*	*$ 998,270*	*$ 489,860*
*Support by HR (budgeted no of employess)*		21	42	28
*Support by IS (budgeted processing time in minutes)*	*320*	-	*1,920*	*1,600*

Required
*1. Allocate the support units costs to the operating units using the direct method.*	*10 marks*
2. Rank the support units based on the percentage of their services provided to other support units. Use this ranking to allocate the support units costs to the operating units based on the step-down method.	*10 marks*
*3. Allocate the support units costs (Human Resources and Information Systems) to the two operating units using the reciprocal method*	*20 marks*
*4. In the case presented in this exercise, which method (direct, step-down or reciprocal) would you recommend? Why?*

Global Network retailer has two operating units-Corporate Sales and Consumer Sales, and two support units-Human Resources and Information Systems. Each sales unit conducts merchandising and marketing operations independently. Global Network uses number of employees to allocate Human Resources costs, and processing time to allocate Information Systems costs. The following data are available for September 2021: Support units Operating units HR IS Corporate Consumer $ $ $ $ 72,700 234,400 998,270 489,860 Budgeted before allocation Support by HR (budgeted no of employess) 21 42 28 Support by IS (budgeted processing time in minutes) 320 1,920 1,600 Required 1. Allocate the support units' costs to the operating units using the 10 marks direct method. 2. Rank the support units based on the percentage of their services 10 marks provided to other support units. Use this ranking to allocate the support units' costs to the operating units based on the step-down method. 3. Allocate the support units' costs (Human Resources and Information 20 marks Systems) to the two operating units using the reciprocal method 4. In the case presented in this exercise, which method (direct, step- 10 marks down or reciprocal) would you recommend? Why