Bens Corporation has three service departments (Repairs, HR, and IT) and two production departments (M1 and M2). The usage data for each of the service departments for the previous period follow: Repairs HR IT M1 M2
Repairs - 0% 0% 40% 60%
HR 10% - 20% 35% 35%
IT 0% 10% - 20% 70%
The direct costs of the service departments in the previous period were $84,000 for Repairs, $103,600 for HR, and $189,000 for IT.
Use the direct method to allocate the service department costs to the production departments

3. saving two consumers, larry and jeff, have utility functions defined over the two periods of their lives: middle age (period zero) and retirement (period 1). they have the same income in period 0 of m dollars and they will not earn income in period 1. the interest rate they face is r. larry’s and jeff’s utility functions are as follow. = 0.5 + 0.5 and = 0.5 + 0.5 for each person is between zero and one and represents each consumer’s temporal discount econ 340: intermediate microeconomics. ben van kammen: purdue university. rate. a. write the budget constraint that applies to both jeff and larry in terms of consumption in each period and ), interest rate, and m. b. what is larry’s and what is jeff’s marginal rate of intertemporal substitution? c. what is the slope of the budget constraint? d. write each consumer’s condition for lifetime utility maximization. e. re-arrange the conditions from part (d) to solve for the ratio, . f. if > which consumer will save more of his middle age income? g. if > 1 1+ , in which period will larry consume more: = 0 or = 1?