Problem $6-69($Algo$)$ Predetermined Rates and Product Profitability: Two$-$Stage Cost Allocation $($LO $6-1,$

$2,3)$

Harmon Recycling Services $($HRS$),$ a not$-$for$-$profit organization, has two drop$-$off centers, Westside and Eastside. The company is

considering using a two$-$stage cost allocation system and wants to assess the effects on reported product profits.

More detailed financial information for HRS follows:

The company plans to use Clients to allocate user$-$related costs and Staff Costs to allocate staff$-$related costs.

Required:

a$.$ Compute the predetermined overhead rate used to apply the two general operating costs pools to the two centers $($Eastside and

Westside$)$ assuming HRS uses the proposed two$-$stage cost system to allocate general operating costs.

b$.$ Based on the rates computed in requirement $($a$),$ what is the surplus $($revenues minus costs$)$ for each service?

Complete this question by entering your answers in the tabs below.

Compute the predetermined overhead rate used to apply the two general operating costs pools to the two centers $($Eastside

and Westside$)$ assuming HRS uses the proposed two$-$stage cost system to allocate general operating costs.

Note: Round your "User$-$related costs" answer to $2$ decimal places.