Section 1: Chapter 7 – (required, 20%) MMG Global features 4…
Section 1: Chapter 7 – (required, 20%) MMG Global features 4 departments: Travel Trade Media (TTM), Tourism Marketing Services (TMS), Human Resources (HR), and Accounting. HR & Accounting are support departments, while TTM and TMS are operating departments. Number of personnel per department provides a reasonable allocation basis for HR, while accounting is allocated based on accountant hours used by each department. Budgeted costs and basis-usage is reported below: Accounting HR TMS TTM budgeted costs 2,000,000 1,500,000 20,000,000 12,000,000 # of personnel 20 40 140 100 accounting hours used 5,000 5,000 18,000 12,000 Please allocate MMG’s total costs to the 4 departments, using: Question 1) The direct method Question 2) The step down method, removing Accounting first Question 3) What 2 formulas would be used in the reciprocal method?