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Icampton Inlematian Senices, Inc, has two service departments: human resources and billing. Camptons erating departments, Lo
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Service Departments Operating Departments
Human Resources Billing Healthcare Retail Legal Services
Cost before allocation $900000 $2710000 $6200000 $5000000 $3000000
Allocation:
Human Resource (900000) 90000 378000 288000 144000
Billing - (2800000) 1540000 728000 532000
Total cost after allocation $0 $0 $8118000 $6016000 $3676000

Allocation of Human Resource Department

Total number of employees except Human resource department= 50+210+160+80= 500

Billing= $900000*50/500= $90000

Healthcare= $900000*210/500= $378000

Retail= $900000*160/500= $288000

Legal services= $900000*80/500= $144000

Allocation of Billing

Total cost of Billing department= $2710000+90000= $2800000

Total annual revenue of all operating departments= $11000000+5200000+3800000= $20000000

Healthcare= $2800000*11000000/20000000= $1540000

Retail= $2800000*5200000/20000000= $728000

Legal services= $2800000*3800000/20000000= $532000

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