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 $273,000. The total cost of the Cafeteria Department is $180,000. The number of employees and the square footage in each department are as follows: Department Security Cafeteria Square Feet 590 2,400 Laser 4,000 Forming 1,600 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. Employees 10 24 40 50 Security Department cost allocation Cafeteria Laser Department Department Forming Department Ⓡ
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 $273,000. The total cost of the Cafeteria Department is $180,000. The number of employees and the square footage in each department are as follows: Department Security Cafeteria Square Feet 590 2,400 Laser 4,000 Forming 1,600 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. Employees 10 24 40 50 Security Department cost allocation Cafeteria Laser Department Department Forming Department Ⓡ
Chapter1: Financial Statements And Business Decisions
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Transcribed Image Text: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 $273,000. The total cost of the Cafeteria Department is $180,000. The number of employees and the square footage in each
department are as follows:
Department
Security
Cafeteria
Laser
Forming
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.
Employees
10
24
40
50
Security Department cost allocation
Square Feet
590
2,400
4,000
1,600
Cafeteria
Laser
Department Department
Forming
Department
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