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Posh Bakery has two support departments, machine maintenance $($MM$)$ and human resources $($HR$).$ Machine maintenance costs for the year total $$520,000$ and are allocated according to the number of budgeted machine hours expected for each department. HR costs for the year total $$220,000$ and are allocated based on employee head count. Use the data below to allocate support department costs to Posh Bakery$$s two production departments: Pies and Cakes.

$$Support DepartmentsProduction DepartmentsTotalMachine MaintenanceHuman ResourcesPiesCakesMM: Machine hours$2,000015,0005,00022,000$HR: Number of employees$2074040107$Costs to allocate$ $520,000$$ $220,000$$ $0$$ $0$$ $740,000$

Required:

Prepare a schedule that allocates support department costs using the reciprocal method. Identify the equations that should be used to determine the costs that should be allocated by the support departments. Compute the total amount of support costs allocated to each operating department: Pies and Cakes.

Posh Bakery has two support departments, machine maintenance $($MM$)$ and human resources $($HR$).$ Machine maintenance costs for the year total $\backslash (\backslash$$ $520,000\backslash )$ and are allocated according to the number of budgeted machine hours expected for each department. HR costs for the year total $\backslash (\backslash$$ $220,000\backslash )$ and are allocated based on employee head count. Use the data below to allocate support department costs to Posh Bakery's two production departments: Pies and Cakes.

Required:

Prepare a schedule that allocates support department costs using the reciprocal method. Identify the equations that should be used to determine the costs that should be allocated by the support departments. Compute the total amount of support costs allocated to each operating department: Pies and Cakes.

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