Rockdale Secure Bank has two support departments: the Human Resources Department and the Computing Department. The bank also has two departments that service customers directly: the Deposits Department and the Loans Department. The usage of the two support departments’ output in the year just ended was as follows: User of service Provider of service Human Resources Computing Human Resources – 20% Computing 20% – Deposits 50% 60% Loans 30% 20% The budgeted costs in the two support departments for the year just ended were: Human Resources $720 000 Computing $1 200 000 Required: 1. Use the direct method to allocate the budgeted costs of the Human Resources and Computing Departments to the Deposits and Loans Departments. 3 marks 2. Use the step-down method to allocate the budgeted costs of the Human Resources and Computing departments to the Deposits and Loans Departments. Rockdale Secure Bank allocates the costs of the Human Resources Department first. 4 marks 3. Use the reciprocal services method to allocate the budgeted costs of the Human Resources and Computing Departments to the Deposits and Loans Departments. 6 marks
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