Vision Books an online book? retailer, has two operating divisionscorporate

sales and consumersalesand two support divisionshuman resources and information systems. Each sales division conducts merchandising and marketing operations independently. Vision Books uses number of employees to allocate human resources costs and processing time to allocate information systems costs. The controller of Vision 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 2015:

	Support Divisions			Operating Divisions
	Human	Information		Corporate	Consumer
	Resources	Systems		Sales	Sales
Budgeted costs incurred before any
interdivision cost allocations	$77,000	$239,000		$992,000	$482,000
Support work supplied by human
resources division
Budgeted number of employees		20		40	31
Support work supplied by information
systems division
Budgeted processing time (in minutes)	340			2,040	1,700

	Support Divisions		Operating Divisions
	HR	Info. Systems	Corporate	Consumer	Total
Costs incurred	$77,000	$239,000	$992,000	$482,000	$1,790,000
Allocation of HR costs	(77,000)		43,380	33,620
Allocation of info. systems costs		(239,000)	130,364	108,636
Total budgeted costs of operating divisions	$0	$0	$1,165,744	$624,256	$1,790,000

	Support Divisions		Operating Divisions
	HR	Info. Systems	Corporate	Consumer	Total
Costs incurred	$77,000	$239,000	$992,000	$482,000	$1,790,000
Allocation of HR costs	(77,000)	16,923	33,846	26,231
	$0	255,923
Allocation of info. systems costs		(255,923)	139,594	116,329
Total budgeted costs of operating divisions		$0	$1,165,440	$624,560	$1,790,000

?*Proportions for services provided to other support? divisions: HR, 0.219780.21978?; ?IS, 0.083330.08333.

Required

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?