Use the information for Leyh Management Co. in Problem P13-53.

a. Allocate the support department costs to the revenue-generating departments using the step method.

b. Which department is apparently the most profitable?

Data From Problem P13-53:-

Leyh Management Co. classifies its operations into three departments: commercial sales, residential sales, and property management. The owner, Ellen Leyh, wants to know the full cost of operating each department. Direct departmental costs and several allocation bases associated with each follow:

The support departments are shown in a benefits-provided ranking. Leyh has selected the following allocation bases for each department: number of employees/salespersons for administration, dollars of assets employed for accounting, and dollars of revenue for promotion.

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89 Available Allocation Bases Number of Direct Costs Employees/ Assets Salespersons Employed Revenue Administration. Accounting. Promotion. $ 1,500,000 20 $2,480,000 N/A 990,000 15 1,364,000 N/A 720,000 12 720,000 N/A Commercial sales. 10,490,000 45 900,000 $10,000,000 Residential sales 9,179,000 210 1,440,000 18,000,000 Property management 398.400 18 540,000 2,000,000