The Brown and Brinkley Brokerage firm is organized into two major sales divisions: institutional clients and retail clients. The firm also has two support departments: research and administration. The research department€™s costs are allocated to the other departments based on a log of hours spent on tasks for each user. The administration department€™s costs are allocated based on the number of employees in each department. Records are available for last period as follows.

REQUIRED
Using the reciprocal method, determine the total cost of operations for each sales division. Use either simultaneous equations or ExcelSolver.

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Support Departments Operating Departments Research $350,000 $230,000 100 Administration Institutional Retail $550,000 $240,000 Payroll costs Other costs Research hours Number of employees $300,000 $150,000 200 10 $400,000 $120,000 300 10 500