$\backslash$begin$\{$tabular$\}\{|$l$|$l$|$l$|$l$|$l$|$l$|$l$|$l$|\}\backslash$hline The Reciprocal Method & & $\backslash$multicolumn$\{2\}\{|$c$|\}\{$Support Departments$\}$ & $\backslash$multicolumn$\{3\}\{|$c$|\}\{$Operating Departments$\}$ & $\backslash \backslash \backslash$hline & & Info Technology & Operations & Claims Process & Administration & Sales & $\backslash$multirow$[$t$]\{2\}\{*\}\{$Total$\}\backslash \backslash \backslash$hline $\backslash$multicolumn$\{2\}\{|$c$|\}\{$DEPARTMENTAL ALLOCATION BASES$\}$ & & & & & & $\backslash \backslash \backslash$hline Info Technology & percent & & $20\mathrm{.}00\backslash \%$ & $20\mathrm{.}00\backslash \%$ & $40\mathrm{.}00\backslash \%$ & $20\mathrm{.}00\backslash \%$ & $100\backslash \%\backslash \backslash \backslash$hline Operations & percent & $10\mathrm{.}00\backslash \%$ & $0\mathrm{.}00\backslash \%$ & $10\mathrm{.}00\backslash \%$ & $50\mathrm{.}00\backslash \%$ & $30\mathrm{.}00\backslash \%$ & $100\backslash \%\backslash \backslash \backslash$hline $\backslash$multicolumn$\{4\}\{|$c$|\}\{$FIRST PHASE: Trace Direct Costs and Perform Initial Allocation of Indirect Costs$\}$ & & & & $\backslash \backslash \backslash$hline Totals for All Departments & & $\backslash$$ $600,000$ & $\backslash$$ $1,800,000$ & $\backslash$$ $450,000$ & $\backslash$$ $850,000$ & $\backslash$$ $650,000$ & $\backslash$$ $4,350,000\backslash \backslash \backslash$hline $\backslash$multicolumn$\{8\}\{|$c$|\}\{$SECOND PHASE: Reallocate Service Department Costs to Operating Departments:$\}\backslash \backslash \backslash$hline $\backslash$multicolumn$\{8\}\{|$c$|\}\{$First: Solve the simultaneous equations for service $1$ and service $2($see Textbook page $243$ for simultaneous equations to solve this question$)\}\backslash \backslash \backslash$hline $\backslash$multicolumn$\{2\}\{|$c$|\}\{$Amount allocated from info systems$\}$ & $\backslash$multicolumn$\{2\}\{|$c$|\}\{600,000\}$ & & & & $\backslash \backslash \backslash$hline $\backslash$multicolumn$\{2\}\{|$c$|\}\{$Amount allocated from Operations$\}$ & $\backslash$multicolumn$\{2\}\{|$c$|\}\{180,000\}$ & & & & $\backslash \backslash \backslash$hline $\backslash$multicolumn$\{4\}\{|$c$|\}\{$Second: Allocate to Producing Departments$\}$ & & & & $\backslash \backslash \backslash$hline $\backslash$multicolumn$\{4\}\{|$c$|\}\{\backslash$begin$\{$tabular$\}\{$l$\}$ Info Technology $\backslash \backslash$ Service $\backslash \%$ to producing di $\backslash$end$\{$tabular$\}\}$ & $20\mathrm{.}00\backslash \%$ & $40\mathrm{.}00\backslash \%$ & $20\mathrm{.}00\backslash \%$ & $\backslash \backslash \backslash$hline $\backslash$multicolumn$\{4\}\{|$c$|\}\{\backslash$multirow$[$t$]\{2\}\{*\}\{$Allocation amount$\}\}$ & $\backslash$multicolumn$\{4\}\{|$c$|\}\{\}\backslash \backslash \backslash$hline & & & & & & & $\backslash \backslash \backslash$hline $\backslash$multicolumn$\{3\}\{|$c$|\}\{\}$ & & $10\mathrm{.}00\backslash \%$ & $50\mathrm{.}00\backslash \%$ & $30\mathrm{.}00\backslash \%$ & $\backslash \backslash \backslash$hline $\backslash$multicolumn$\{3\}\{|$c$|\}\{$Allocation amount$\}$ & & & & & $\backslash \backslash \backslash$hline $\backslash$multicolumn$\{3\}\{|$c$|\}\{$Totals for Operating Departments$\}$ & & & & & $\backslash$$ $4,350,000\backslash \backslash \backslash$hline $\backslash$end$\{$tabular$\}$