Valron Company has two support departments, Human Resources andGeneral Factory, and two producing departments, Fabricating andAssembly.

	Support Departments		ProducingDepartments
	Human Resources	General Factory	Fabricating	Assembly
Direct costs	$150,000	$330,000	$114,800	$94,000
Normal activity:
Number of employees	—	60	80	170
Square footage	1,000	—	5,700	13,300

The costs of the Human Resources Department are allocated on thebasis of number of employees, and the costs of General Factory areallocated on the basis of square footage.

Now assume that Valron Company uses the reciprocal method toallocate support department costs.

Required:

1. Calculate the allocation ratios (rounded tofour significant digits) for the four departments using thereciprocal method. If an amount is zero, enter "0". Use the roundedvalues for subsequent calculations.

	Proportion of Driver Used by
	Human Resources	General Factory	Fabricating	Assembly
Human Resources
General Factory

2. Develop a simultaneous equations system oftotal costs for the support departments. If required, round youranswers to four decimal places. Use these numbers for subsequentcalculations. If required, round all other intermediatecalculations to six decimal places, except the answers computed inrequirement 1.

Human Resources (HR)	=	$	+	(GF)
General Factory (GF)	=	$	+	(HR)

Solve for the total reciprocated costs of each supportdepartment. (Round reciprocated total costs to the nearestdollar.)

Human Resources (HR)	$
General Factory (GF)	$

3. Using the reciprocal method, allocate thecosts of the Human Resources and General Factory departments to theFabricating and Assembly departments. Round all allocated costs tothe nearest dollar. If an amount is zero, enter "0". Note: Theremay be a "$1" difference due to intermediate rounding.

	Support Departments			Producing Departments
	Human Resources	General Factory		Fabricating	Assembly
Direct costs	$	$		$	$
Allocate:
Human Resources
General Factory
Total after allocation	$	$		$	$