Step method Use the information in Exercise E13-27 to compute total cost for each revenue-generating area if Prosperous Bank uses the step method of cost allocation.

Data From Exercise E13-27:-

Prosperous Bank has three support areas (administration, human resources, and accounting) and three revenue-generating areas (checking accounts, savings accounts, and loans). Monthly direct costs and the interdepartmental support structure are shown in the following benefits-provided ranking:

Compute the total cost for each revenue-generating area of the bank using the direct method.

Direct Department Costs Percentage of Service Used by Human Admin. Resources Accounting Checking Savings Loans Administration... $540,000 10 10 30 40 Human resources... 360,000 10 Accounting. 300,000 100 10 30 20 10 10 40 20 22 282 10 30 20 Checking. 630,000 Savings. 337,500 Loans 675,000