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: Security Department Cafeteria Department Laser Department Forming Department Employees 10 18 40 50 Square Feet Security Department cost allocation 540 2,400 2,400 3,200 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. Cafeteria Department X Laser 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 $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: Security Department Cafeteria Department Laser Department Forming Department Employees 10 18 40 50 Square Feet Security Department cost allocation 540 2,400 2,400 3,200 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. Cafeteria Department X Laser Department Forming Department $
Managerial Accounting
15th Edition
ISBN:9781337912020
Author:Carl Warren, Ph.d. Cma William B. Tayler
Publisher:Carl Warren, Ph.d. Cma William B. Tayler
Chapter5: Support Department And Joint Cost Allocation
Section: Chapter Questions
Problem 3E: Blue Africa Inc. produces laptops and desktop computers. The companys production activities mainly...
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