Secure Bank has two support departments: the human resources department and the computing department. L07.10 The bank also has two departments that service customers directly: the deposits department and the loans department. Usage of the two support departments' output in the year just ended was as follows:

Provlder of servlce

User of servlce Human resources Computlng

Human resources 0 20%

Computing 20% 0

Deposits 50% 60%

Loans 30% 20%

The budgeted costs in the two support departments for the year just ended were:

Human resources $720000

Computing 1200000

Q:

Use the step-down method to allocate the budgeted costs ofthe human resources and computing departments to the deposits and loans departments. Secure Bank allocates the costs of the human resources department first.