Brewster Toymakers Inc. produces toys for children. The toys are produced in the Molding andAssembly departments. The Janitorial and Security departments support the production of thetoys. Costs from the Janitorial Department are allocated based on square feet. Costs from theSecurity Department are allocated based on asset value. Relevant department information isprovided in the following table: Using the reciprocal services method of support department cost allocation, determine(a) the percentage of Janitorial costs that should be allocated to the Security Departmentand(b) the percentage of Security costs that should be allocated to the Janitorial Department. ### Department Overview TableThis table provides a detailed comparison of four departments within a company: Janitorial, Security, Molding, and Assembly. It outlines three key metrics for each department: square feet of space, asset value, and department cost.#### Table Breakdown1. **Square Feet:** - **Janitorial Department:** 650 sq ft - **Security Department:** 1,600 sq ft - **Molding Department:** 1,600 sq ft - **Assembly Department:** 4,800 sq ft2. **Asset Value:** - **Janitorial Department:** $200 - **Security Department:** $220 - **Molding Department:** $1,800 - **Assembly Department:** $2,0003. **Department Cost:** - **Janitorial Department:** $2,000 - **Security Department:** $1,600 - **Molding Department:** $10,800 - **Assembly Department:** $12,200### Analysis- The **Assembly Department** occupies the largest area and incurs the highest cost, indicating its central role in operations.- The **Janitorial Department** manages the smallest space and asset value, reflecting its support role in maintenance and cleanliness.- Both **Security** and **Molding Departments** have identical square footage, but the **Molding Department** has significantly higher asset value and cost, signifying its role in production processes.This table aids in understanding the spatial, financial, and operational distribution among different departments, useful for budgeting and resource allocation.

A cost allocation approach establishes what services are delivered and how much they cost. A cost…

Answered: Brewster Toymakers Inc. produces toys…

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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Brewster Toymakers Inc. produces toys for children. The toys are produced in the Molding and
Assembly departments. The Janitorial and Security departments support the production of the
toys. Costs from the Janitorial Department are allocated based on square feet. Costs from the
Security Department are allocated based on asset value. Relevant department information is
provided in the following table:

Using the reciprocal services method of support department cost allocation, determine
(a) the percentage of Janitorial costs that should be allocated to the Security Department
and
(b) the percentage of Security costs that should be allocated to the Janitorial Department.

### Department Overview Table

This table provides a detailed comparison of four departments within a company: Janitorial, Security, Molding, and Assembly. It outlines three key metrics for each department: square feet of space, asset value, and department cost.

#### Table Breakdown

1. **Square Feet:**
- **Janitorial Department:** 650 sq ft
- **Security Department:** 1,600 sq ft
- **Molding Department:** 1,600 sq ft
- **Assembly Department:** 4,800 sq ft

2. **Asset Value:**
- **Janitorial Department:** $200
- **Security Department:** $220
- **Molding Department:** $1,800
- **Assembly Department:** $2,000

3. **Department Cost:**
- **Janitorial Department:** $2,000
- **Security Department:** $1,600
- **Molding Department:** $10,800
- **Assembly Department:** $12,200

### Analysis

- The **Assembly Department** occupies the largest area and incurs the highest cost, indicating its central role in operations.
- The **Janitorial Department** manages the smallest space and asset value, reflecting its support role in maintenance and cleanliness.
- Both **Security** and **Molding Departments** have identical square footage, but the **Molding Department** has significantly higher asset value and cost, signifying its role in production processes.

This table aids in understanding the spatial, financial, and operational distribution among different departments, useful for budgeting and resource allocation.

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