A bank has three service centers: EDP (electronic data processing), copying, and accounting. These service centers provide services to one another as well as to three operating divisions: A, B, and C.
The distribution of each service center’s output as well as its cost (in millions) is given in the accompanying table.

Required:
Using the reciprocal method, allocate the costs of the service centers to the three operating divisions.

Transcribed Image Text:

EDP Copy center Accounting EDP 0.15 0.10 0.08 Fraction of Service Center Output Used Copying Accounting 0.06 0.32 0.00 0.25 0.04 0.12 Division Division A B 0.19 0.25 0.30 0.13 0.22 0.24 Division 0.15 0.18 0.22 Total Cost $ 8.90 1.80 6.40 $17.10