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Baldwin Enterprises has two service departments, Personnel and Legal, and two operating divisions, Eastern...

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Accounting

Baldwin Enterprises has two service departments, Personnel and Legal, and two operating divisions, Eastern and Western. Personnel costs are allocated on the basis of employees and Legal costs are allocated on the basis of hours. A summary of Baldwin operations follows:
Personnel Legal Eastern Western
Employees -4012040
Hours 10,800-5,4001,800
Department direct costs $ 300,000 $ 160,000 $ 1,200,000 $ 790,000
Required:
Allocate the cost of the service departments to the operating divisions using the direct method.
Allocate the cost of the service departments to the operating divisions using the step method. Start with Legal.
Allocate the cost of the service departments to the operating divisions using the reciprocal method.

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