,Tech Books, an online book retailer, has two operating divisionscorporate sales and consumer salesand two support divisionshuman resources and information systems. Each sales division conducts merchandising and marketing operations independently. Tech Books uses number of employees to allocate human resources costs and processing time to allocate information systems costs. The controller of Tech Books reads a widely used textbook that states "the reciprocal method is conceptually the most defensible." He seeks your assistance. The following data are available for September

1.

Describe the key features of the reciprocal method.

2.

Allocate the support divisions' costs (human resources and information systems) to the two operating divisions using the reciprocal method.

3.

In the case presented in this exercise, which method (direct, step-down, or reciprocal) would you recommend? Why?

"Proportions for services provided to other support divisions: HR, 0.24742; IS, 0.08974