Blue Africa Inc. produces laptops and desktop computers. The company’s production activities mainly occur in what the company calls its Laser and Forming departments. The Cafeteria and Security departments support the company’s production activities and allocate costs based on the number of employees and square feet, respectively. The total cost of the Security Department is $246,000. The total cost of the Cafeteria Department is $838,000. The number of employees and the square footage in each department are as follows: Employees Square FeetSecurity Department10 540 Cafeteria Department24 2,400 Laser Department40 3,200 Forming Department50 2,400 Using the reciprocal services method of support department cost allocation, determine the total costs from the Security Department that should be allocated to the Cafeteria Department and to each of the production departments. CafeteriaDepartment LaserDepartment FormingDepartmentSecurity Department cost allocation Blue Africa Inc. produces laptops and desktop computers. The company's production activities mainly occur in what the company calls its Laser and Forming departments. The Cafeteriaand Security departments support the company's production activities and allocate costs based on the number of employees and square feet, respectively. The total cost of the SecurityDepartment is $246,000. The total cost of the Cafeteria Department is $838,000. The number of employees and the square footage in each department are as follows:Square FeetEmployeesSecurity Department10Cafeteria Department24Laser Department40Forming Department50Using the reciprocal services method of support department cost allocation, determine the total costs from the Security Department that should be allocated to the Cafeteria Departmentand to each of the production departments.Security Department cost allocation5402,4003,2002,400LaserCafeteriaDepartmentFormingDepartmentDepartment$274,046. X $1,096,18 X $5,709.72 X

Answered: Blue Africa Inc. produces laptops and…

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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Blue Africa Inc. produces laptops and desktop computers. The company’s production activities mainly occur in what the company calls its Laser and Forming departments. The Cafeteria and Security departments support the company’s production activities and allocate costs based on the number of employees and square feet, respectively. The total cost of the Security Department is $246,000. The total cost of the Cafeteria Department is $838,000. The number of employees and the square footage in each department are as follows:

	Employees	Square Feet
Security Department	10	540
Cafeteria Department	24	2,400
Laser Department	40	3,200
Forming Department	50	2,400

Using the reciprocal services method of support department cost allocation, determine the total costs from the Security Department that should be allocated to the Cafeteria Department and to each of the production departments.