Question

Aurora National Bank has two service departments, the Human Resources (HR) Department and the Computing Department....

Aurora National Bank has two service departments, the Human Resources (HR) Department and the Computing Department. The bank has two other departments that directly service customers, the Deposit Department and the Loan Department. The usage of the two service departments’ output for the year is as follows:
   Provider of Service
  User of Service Human Resources Computing
  Human Resources (HR) — 20 %
  Computing 10 % —
  Deposit 60 % 40 %
  Loan 30 % 40 %
The budgeted costs in the two service departments for the year are as follows:
  
  Human Resources $ 477,000
  Computing 715,000
Required:

Use the step-down method to allocate the budgeted costs of the Human Resources and Computing departments to the Deposit and Loan departments. Aurora National Bank allocates the costs of the Human Resources Department first. (Do not round intermediate calculations.)
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Answer #1

Use the step-down method to allocate the budgeted costs of the Human Resources and Computing departments to the Deposit and Loan departments. Aurora National Bank allocates the costs of the Human Resources Department first

Human resources Computing Deposit Loan
Department cost 477000 715000
Allocation of human resources cost -477000 47700 286200 143100
Allocation of computing cost -762700 381350 381350
Total - - 667550 524450
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