Superman Store has two support departments, Information Systems and Personnel. The Information Systems Department costs are...

Superman Store has two support departments, Information Systems and Personnel. The Information Systems Department costs are allocated on the basis of hours used. The Personnel Department costs are allocated based on the number of employees. Data on information systems hours used and number of employees are as follows:

Information

Allocation Bases: Systems Personnel Fruit Nut

Total cost $120,000 $30,000 $60,000 $90,000

Information systems hours used 600 600 720 480

Number of employees 10 20 40 120

a. Write the equations needed to allocate support department costs using the reciprocal method.

b. Solve for the total cost to be allocated under the reciprocal method for the Information Systems

Department.

Solutions

Expert Solution

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