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Hessel Corporation has two operating departments (Domestic and Global) and three service departments: Human Resources (HR), Legal, and Testing. In the most recent period, the
Hessel Corporation has two operating departments (Domestic and Global) and three service departments: Human Resources (HR), Legal, and Testing. In the most recent period, the following costs and service department usage ratios were recorded:
Supplying Department | Using Department | |||||
---|---|---|---|---|---|---|
Human Resources | Legal | Testing | Domestic | Global | ||
Human Resources | 0 | 15% | 10% | 25% | 50% | |
Legal | 10% | 0 | 0 | 30% | 60% | |
Testing | 10% | 0 | 0 | 45% | 45% | |
Direct cost | $ 264,500 | $ 190,000 | $ 90,000 | $ 558,000 | $ 507,000 |
Required:
Allocate the service department costs to the two operating departments using the reciprocal method.
Note: Do not round intermediate calculations.
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