Baldwin Enterprises has two service departments, Personnel and Legal, and two operating divisions, Eastern and Western. Personnel
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Question:
Baldwin Enterprises has two service departments, Personnel and Legal, and two operating divisions, Eastern and Western. Personnel costs are allocated on the basis of employees and Legal costs are allocated on the basis of hours. A summary of Baldwin operations follows:
Personnel Legal Eastern Western
Employees
Hours
Department direct costs $ $ $ $
Required:
Allocate the cost of the service departments to the operating divisions using the direct method.
Allocate the cost of the service departments to the operating divisions using the step method. Start with Legal.
Allocate the cost of the service departments to the operating divisions using the reciprocal method.
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