Assume the following information in the chart: Security Dept. Cafeteria Dept. 1,000 square feet 4,000 square feet 10 employees 6 employees $100,000 cost $200,000 cost Production A Dept. Production B Dept. 3,000 square feet 3,000 square feet 40 employees 50 employees $400,000 cost $300,000 cost Using the reciprocal services method, what is the total security costs before being allocated over to the production departments? $125,000
Assume the following information in the chart: Security Dept. Cafeteria Dept. 1,000 square feet 4,000 square feet 10 employees 6 employees $100,000 cost $200,000 cost Production A Dept. Production B Dept. 3,000 square feet 3,000 square feet 40 employees 50 employees $400,000 cost $300,000 cost Using the reciprocal services method, what is the total security costs before being allocated over to the production departments? $125,000
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Assume the following information in the chart:
Security Dept.
Cafeteria Dept.
1,000 square feet
4,000 square feet
10 employees
6 employees
$100,000 cost
$200,000 cost
Production B Dept.
3,000 square feet
50 employees
$300,000 cost
Using the reciprocal services method, what is the total security costs before being allocated over
to the production departments?
$125,000
$110,000
$120,000
O $100,000
Production A Dept.
3,000 square feet
40 employees
$400,000 cost
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