Problem $6-69($Static$)$ 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:

$$EastsideWestsideTotalClients$25,0006,25031,250$Revenues$ $270,000$$ $180,000$$ $450,000$Staff hours$8,1002,70010,800$Staff costs$ $99,000$$ $81,000$$ $180,000$General operating costs:$$User$-$related$$$ $135,000$Staff$-$related$135,000$Total general operating costs$$$ $270,000$

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

Required:

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.

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