Salado Inc. provides cleaning services through its Residential and Commercial divisions. Support services of the company are provided by Personnel and Administration areas. Costs of these two areas are allocated to the revenue producing departments. Personnel costs are allocated using number of employees; administration costs are allocated using direct department costs. The following 2013 budgeted information (presented in a benefits-provided ranking) is available:

a. Using the direct method, allocate the costs of Personnel and Administration to the Residential and Commercial divisions.
b. Using the step method, allocate the costs of Personnel and Administration to the Residential and Commercial divisions.
c. Salado prices jobs by the direct labor hour for Residential services and by the square foot cleaned for Commercial services. Compute the full cost of providing one direct labor hour of service for Residential and for one square foot cleaned for Commercial using
(1) The direct method
(2) The step method. (Round cost per hour and cost per square foot to nearestcent.)

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Personnel Administration Residenial Commercial $140,000 Direct costs 5180,000 30 $480,000 72 60,000 450,000 $800,000 48 90,000 570,000 Number of employees Direct labor hours 12 Square feet deaned