James Realty classifies its operations into three departments: Commercial Sales, Residential Sales, and Property Management. The owner, Mary Manalo, wants to know the full cost of operating each department. Direct departmental costs and several allocation bases associated with each follow:

		Available	Allocation	Bases
	Direct Costs	No. of Employees	Pesos of assets employed	Pesos of Revenues
Administration	$ 750,000	10	$ 1,240,000	n/a
Accounting	$ 495,000	5	$ 682,000	n/a
Promotion	$ 360,000	6	$ 360,000	n/a
Commercial Sales	$ 5,245,000	21	$ 500,000	$ 4,500,000
Residential Sales	$ 4,589,510	101	$ 725,000	$ 9,500,000
Property Management	$ 199,200	13	$ 175,000	$ 500,000

The support departments are shown in a benefits-provided ranking. James has selected the following allocation bases for each department: number of employees for administration, pesos of assets employed for accounting, and pesos of revenue for promotion.

Required:

a. Use the step method to allocate the support department costs to the revenue-generating departments.

b. which department is apparently the most profitable.