(Step method) Prosperous Bank has three support areas (administration, human resources, and accounting) and three revenue generating areas (checking accounts, savings accounts, and loans). Monthly direct costs and the interdepartmental support structure are shown in the following benefits provided ranking:
|
PERCENTAGE OF SERVICE USED BY |
|||||||
|
Direct |
|
|
Human |
|
|
|
|
|
Department |
Costs |
Admin. |
Resources |
Accounting |
Checking |
Savings |
Loans |
|
Administration |
$540,000 |
|
10 |
10 |
30 |
40 |
10 |
|
Human |
|
|
|
|
|
|
|
|
resources |
360,000 |
10 |
|
10 |
30 |
20 |
30 |
|
Accounting |
300,000 |
10 |
10 |
|
40 |
20 |
20 |
|
Checking |
630,000 |
|
|
|
|
|
|
|
Savings |
337,500 |
|
|
|
|
|
|
|
Loans |
675,000 |
|
|
|
|
|
|
Compute total cost for each revenue generating area if Prosperous Bank uses the step method of cost allocation.