E-Mark, an online store, has two operating divisions - Corporate Sales and Consumer Sales -...
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Accounting
E-Mark, an online store, has two operating divisions - Corporate Sales and
Consumer Sales - and two support divisions -Admin and IT. Each operating division operates
independently. E-Mark uses number of employees to allocate Admin costs and processing time
to allocate IT costs. The following data are available for the month:
SUPPORT DEPT OPERATING DEPT
Admin IT Corp Sales Cons. Sales
Budgeted costs incurred before
any interdivision allocations $85,000 $200,000 $1,000,000 $500,000
Admin budgeted # of employees
deployed 20 40 40
IT budgeted # of processing time
deployed (minutes) 300 2,000 1,700
Using the reciprocal method, allocate the support department costs.
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