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reciprocal method

reciprocal method

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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A D 23 24 25 b) Using the step-down method, what are the total costs of the operating departments after 26 support costs are allocated if the support department having the highest cost is allocated first? 7 8 9 D 1 c) Using the reciprocal method, what are the total costs of the operating departments after support costs are allocated?
Transcribed Image Text:A D 23 24 25 b) Using the step-down method, what are the total costs of the operating departments after 26 support costs are allocated if the support department having the highest cost is allocated first? 7 8 9 D 1 c) Using the reciprocal method, what are the total costs of the operating departments after support costs are allocated?
23 4 5 6 7 8 A 1 Period Cost Allocation Methods Cement Plus has two support departments, Information Systems and Personnel. The Information Systems Department costs of $120,000 are allocated on the basis of hours used. The Personnel Department costs of $30,000 are allocated based on the number of employees. Costs of the two operating departments are $60,000 for Bricks and $90,000 for Bars. Data on information systems hours used and number of employees are as follows: 9 Allocation Bases: O Information systems hours used 1 Number of employees 2 Information Systems • 10 D Personnel 600 E Bricks 720 40 F Bars 480 120 Required: a) Using the direct method, what are the total costs of the operating departments after support costs are allocated
Transcribed Image Text:23 4 5 6 7 8 A 1 Period Cost Allocation Methods Cement Plus has two support departments, Information Systems and Personnel. The Information Systems Department costs of $120,000 are allocated on the basis of hours used. The Personnel Department costs of $30,000 are allocated based on the number of employees. Costs of the two operating departments are $60,000 for Bricks and $90,000 for Bars. Data on information systems hours used and number of employees are as follows: 9 Allocation Bases: O Information systems hours used 1 Number of employees 2 Information Systems • 10 D Personnel 600 E Bricks 720 40 F Bars 480 120 Required: a) Using the direct method, what are the total costs of the operating departments after support costs are allocated
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