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Assume that Kizzle's management allocates Maintenance costs based on the number of service calls. Further assume that in a given riod, the Janitorial, Mixing, and Cooking activities incur 16, 40, and 24 service calls, respectively, and that the Janitorial and aintenance costs of that period are $3,000 and $4,200, respectively. Determine the total costs allocated from each support activity to ne other three activities using the reciprocal services method. Maintenance cost allocation: Janitorial: 2$ Mixing: %24 Cooking: %$4 Janitorial cost allocation: Maintenance: %24 Mixing: Cooking: 3. The company is considering changing from the reciprocal service method to a simpler method. Why should the company continue with the reciprocal service method? a. It is complex, but more accurate.

Assume that Kizzle's management allocates Maintenance costs based on the number of service calls. Further assume that in a given riod, the Janitorial, Mixing, and Cooking activities incur 16, 40, and 24 service calls, respectively, and that the Janitorial and aintenance costs of that period are $3,000 and $4,200, respectively. Determine the total costs allocated from each support activity to ne other three activities using the reciprocal services method. Maintenance cost allocation: Janitorial: 2$ Mixing: %24 Cooking: %$4 Janitorial cost allocation: Maintenance: %24 Mixing: Cooking: 3. The company is considering changing from the reciprocal service method to a simpler method. Why should the company continue with the reciprocal service method? a. It is complex, but more accurate.

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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**Cost Allocation Exercise** Assume that Kizzle’s management allocates Maintenance costs based on the number of service calls. Further assume that in a given period, the Janitorial, Mixing, and Cooking activities incur 16, 40, and 24 service calls, respectively, and that the Janitorial and Maintenance costs of that period are $3,000 and $4,200, respectively. Determine the total costs allocated from each support activity to the other three activities using the reciprocal services method. ### Maintenance Cost Allocation: - **Janitorial:** \$ _______ - **Mixing:** \$ _______ - **Cooking:** \$ _______ ### Janitorial Cost Allocation: - **Maintenance:** \$ _______ - **Mixing:** \$ _______ - **Cooking:** \$ _______ **Question 3**: The company is considering changing from the reciprocal services method to a simpler method. Why should the company continue with the reciprocal service method? a. It is complex, but more accurate.
Transcribed Image Text:**Cost Allocation Exercise** Assume that Kizzle’s management allocates Maintenance costs based on the number of service calls. Further assume that in a given period, the Janitorial, Mixing, and Cooking activities incur 16, 40, and 24 service calls, respectively, and that the Janitorial and Maintenance costs of that period are $3,000 and $4,200, respectively. Determine the total costs allocated from each support activity to the other three activities using the reciprocal services method. ### Maintenance Cost Allocation: - **Janitorial:** \$ _______ - **Mixing:** \$ _______ - **Cooking:** \$ _______ ### Janitorial Cost Allocation: - **Maintenance:** \$ _______ - **Mixing:** \$ _______ - **Cooking:** \$ _______ **Question 3**: The company is considering changing from the reciprocal services method to a simpler method. Why should the company continue with the reciprocal service method? a. It is complex, but more accurate.
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