Home / Questions / Direct method Prosperous Bank has three support areas (administration, human resources, an...
Direct method) Prosperous Bank has three support areas (administration, human resources, and accounting) and three revenue-generating areas (checking accounts, savings accounts, and loans). Monthly direct costs and the interdepartmental support structure are shown in the following benefits-provided ranking:
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PERCENTAGE OF SERVICE USED BY |
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|
Direct |
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|
Human |
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|
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|
Department |
Costs |
Admin. |
Resources |
Accounting |
Checking |
Savings |
Loans |
|
Administration |
$540,000 |
|
10 |
10 |
30 |
40 |
10 |
|
Human |
|
|
|
|
|
|
|
|
resources |
360,000 |
10 |
|
10 |
30 |
20 |
30 |
|
Accounting |
300,000 |
10 |
10 |
|
40 |
20 |
20 |
|
Checking |
630,000 |
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|
|
|
|
|
|
Savings |
337,500 |
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|
|
|
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|
Loans |
675,000 |
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Compute the total cost for each revenue-generating area of the bank using the direct method.
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