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Prosperous Bank has three support areas (administration, human resources, and accounting) and three revenue-generating areas (checking accounts, savings accounts, and loans). Monthly direct costs and
Prosperous Bank has three support areas (administration, human resources, and accounting) and three revenue-generating areas (checking accounts, savings accounts, and loans). Monthly direct costs and the interdepartmental support structure are shown in the following benefits-provided ranking:
| Percentage of Service Used by | |||||||
|---|---|---|---|---|---|---|---|
| Department | Direct Costs | Admin. | Human Resources | Accounting | Checking | Savings | Loans |
| Administration | $540,000 | 10 | 10 | 30 | 40 | 10 | |
| Human resources | 360,000 | 10 | 10 | 30 | 20 | 30 | |
| Accounting | 300,000 | 10 | 10 | 40 | 20 | 20 | |
| Checking | 630,000 | ||||||
| Savings | 337,500 | ||||||
| Loans | 675,000 | ||||||
Compute the total cost for each revenue-generating area of the bank using the step-method of cost allocation.
Note: Do not round proportions in your calculations; round your final answer to the nearest whole dollar.
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