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Please fill out the boxes and the Requirements ALL information is provided in the images please help! Allocate the support departments' costs ( human resources
Please fill out the boxes and the Requirements ALL information is provided in the images please help!
Allocate the support departments' costs human resources and
information systems to the two operating departments using the reciprocal
method. Use a linear equations and b repeated iterations.
In the case presented in this exercise, which method direct stepdown,
or reciprocal would you recommend? Why?
More info
Each sales department conducts merchandising and marketing operations
independently. Ebooks uses number of employees to allocate human resource
costs and processing time to allocate information systems costs. The controller of
Ebooks reads a widely used textbook that states that "the reciprocal method is
conceptually the most defensible." He seeks your assistance.
Stepdown allocation data
Done
Data table
Direct allocation dataRequirement Allocate the support departments' costs human resources and information systems to the two operating departments using the reciprocal method.
human resources; IS information system.
zero balances.
Requirement In the case presented in this exercise, which method direct stepdown, or reciprocal would you recommend? Why?
Recommendation: The
because it is more accurate than the other two methods when there are mutual relationships among support departments.
Why would you recommend this method?
A It is easy to compute and understand, and being precise is not necessary.
B It ranks support departments in the order that the allocation is to proceed and partially recognizes the mutual services provided.
: It fully incorporates interdepartmental relationships into the support departments cost allocation.
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