Exercise $9-32($Algo$)$ Unitwide versus Department Allocation$-$Decision Making $($LO $9-1,2,3)$

The manager of the Los Angeles office is now unhappy with the results of the controller's study. The manager asks the controller to

develop separate rates for fixed and variable costs in the Personnel Department. The controller reports back to the Los Angeles

manager that the costs would be as follows:

Required:

a$.$ The manager claims that the Los Angeles office should only be allocated the variable costs from this system, because the company

would have to pay the fixed costs even if the Los Angeles office did not exist. Compute the cost allocated to each unit using the

approach the Los Angeles manager prefers.