Required: 1. Calculate the allocation ratios (rounded to four significant digits) for the four departments using the reciprocal method. If an amount is zero, enter "0". Use the rounded values for subsequent calculations. Proportion of Driver Used by Human Resources General Factory Human Resources ✓ General Factory ✓ Fabricating Assembly
Required: 1. Calculate the allocation ratios (rounded to four significant digits) for the four departments using the reciprocal method. If an amount is zero, enter "0". Use the rounded values for subsequent calculations. Proportion of Driver Used by Human Resources General Factory Human Resources ✓ General Factory ✓ Fabricating Assembly
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
![Reciprocal Method of Support Department Cost Allocation
Chekov Company has two support departments, Human Resources and General Factory, and two producing departments, Fabricating and Assembly.
Direct costs
Normal activity:
Number of employees
Square footage
Support Departments
Human
Resources
$150,000
Human Resources
1,500
General Factory
Human Resources
General
Factory
$330,000
0
60
✓
Producing Departments
14,000
)
The costs of the Human Resources Department are allocated on the basis of number of employees, and the costs of General Factory are allocated on the basis of square footage.
Now assume that Chekov Company uses the reciprocal method to allocate support department costs.
Fabricating Assembly
$114,800
$95,000
Required:
1. Calculate the allocation ratios (rounded to four significant digits) for the four departments using the reciprocal method. If an amount is zero, enter "0". Use the rounded values for subsequent calculations.
Proportion of Driver Used by
General Factory
45
X
6,000
0 ✓
80
Fabricating
Assembly](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F6cf5b773-adde-4551-97e4-2c7c6d4cf828%2Fa6447437-840f-4ffa-84ad-51e430c6ba33%2F99chefn_processed.png&w=3840&q=75)
Transcribed Image Text:Reciprocal Method of Support Department Cost Allocation
Chekov Company has two support departments, Human Resources and General Factory, and two producing departments, Fabricating and Assembly.
Direct costs
Normal activity:
Number of employees
Square footage
Support Departments
Human
Resources
$150,000
Human Resources
1,500
General Factory
Human Resources
General
Factory
$330,000
0
60
✓
Producing Departments
14,000
)
The costs of the Human Resources Department are allocated on the basis of number of employees, and the costs of General Factory are allocated on the basis of square footage.
Now assume that Chekov Company uses the reciprocal method to allocate support department costs.
Fabricating Assembly
$114,800
$95,000
Required:
1. Calculate the allocation ratios (rounded to four significant digits) for the four departments using the reciprocal method. If an amount is zero, enter "0". Use the rounded values for subsequent calculations.
Proportion of Driver Used by
General Factory
45
X
6,000
0 ✓
80
Fabricating
Assembly
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