II. Cost allocation using Reciprocal MethodCheese Whiz Co, a Swiss manufacturer of cheese products, has two servicecenters and two producing departments. Data for month month of October are asfollows:Service CentersMaintenanceUtilitiesCost (Swiss francs)Service provided to:Maintenance66,00045,00010%Utilities20%40%40%Producing Dept. 1Producing Dept. 2Direct cost to producing departmentsDepartment 1 - Sf 280,00030%60%Department 2 - Sf 220,000Required: Using Reciprocal method, allocate the cost of service centers to producingdepartments and calculate ther total cost of the producing departments.

Under reciprocal service method, the cost of service departments are allocated between themselves…

II. Cost allocation using Reciprocal Method Cheese Whiz Co, a Swiss manufacturer of cheese products, has two service centers and two producing departments. Data for month month of October are as follows: Service Centers Maintenance Utilities Cost (Swiss francs) Service provided to: Maintenance Utilities 66,000 45,000 10% 20% 40% 40% Producing Dept. 1 Producing Dept. 2 Direct cost to producing departments Department 1 - Sf 280,000 30% 60% Department 2 - Sf 220,000 Required: Using Reciprocal method, allocate the cost of service centers to producing departments and calculate ther total cost of the producing departments.

II. Cost allocation using Reciprocal Method Cheese Whiz Co, a Swiss manufacturer of cheese products, has two service centers and two producing departments. Data for month month of October are as follows: Service Centers Maintenance Utilities Cost (Swiss francs) Service provided to: Maintenance Utilities 66,000 45,000 10% 20% 40% 40% Producing Dept. 1 Producing Dept. 2 Direct cost to producing departments Department 1 - Sf 280,000 30% 60% Department 2 - Sf 220,000 Required: Using Reciprocal method, allocate the cost of service centers to producing departments and calculate ther total cost of the producing departments.

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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Support Department Cost Allocation-Reciprocal Services Method 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 $242,000. The total cost of the Cafeteria Department is $878,000. The number of employees and the square footage in each department are as follows: Employees Square Feet 10 18 2,400 ETT 40 2,400 50 Security Department Cafeteria Department Laser Department Forming Department 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. Security Department cost allocation 540 3,200 Cafeteria…
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