Harmon Recycling Services (HRS), a not-for-profit organization, has two drop-off centers, Westside and Eastside The...

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Accounting

Harmon Recycling Services (HRS), a not-for-profit organization, has two drop-off centers, Westside and Eastside The company is
considering using a two-stage cost allocation system and wants to assess the effects on reported product profits.
More detailed financial information for HRS follows
The company plans to use Clients to allocate user-related costs and Staff Costs to allocate staff-related costs.
An accounting student from the local college working on a related project at HRS as a part of a course, suggested a further revision
after an analysis of the general operating accounts. Specifically the student suggested that the staff-related costs should be separated
into two cost pools instead of one. One pool puould be allocated based on staff hours and the other pool allocated based on staff costs.
The general operating costs could be summarized as follows:
User-related operating costs
Staff hour-related operating costs
Staff cost-related operating cost
Total general operating cost
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