Reference no: EM132982730

Secure Bank has two support departments: the human resources department and the computing department. L07.10 The bank also has two departments that service customers directly: the deposits department and the loans department.

Usage of the two support departments' output in the year just ended was as follows:

                                                                                                            Provlder of servlce
                                                               User of servlce Human resources         Computlng
Human resources                                                  0                                        20%
Computing                                                            20%                                        0
Deposits                                                             50%                                          60%
Loans                                                                   30%                                        20%

The budgeted costs in the two support departments for the year just ended were:

Human resources $720000
Computing 1200000

Problem 1: Use the reciprocal services method to allocate the budgeted costs of the human resources and computing departments to the deposits and loans departments.