Support department cost allocation-reciprocal services method Davis Snowflake & Co. produces Christmas stockings in its Cutting and Sewing departments. The Maintenance and Security departments support the production of the stockings. Costs from the Maintenance Department are allocated based on machine hours, and costs from the Security Department are allocated based on asset value. Information about each department is provided in the following table: Machine hours Asset value Department cost $35,280 Maintenance Security Sewing Department Department Department Department 800 2,000 8,400 9,600 $2,000 $1,470 $3,000 $5,000 $15,680 $67,000 $84,000 Cutting Determine the total cost of each production department after allocating all support department costs to the production departments using the reciprocal services method. Production departments' total costs Cutting Sewing Department Department x x
Support department cost allocation-reciprocal services method Davis Snowflake & Co. produces Christmas stockings in its Cutting and Sewing departments. The Maintenance and Security departments support the production of the stockings. Costs from the Maintenance Department are allocated based on machine hours, and costs from the Security Department are allocated based on asset value. Information about each department is provided in the following table: Machine hours Asset value Department cost $35,280 Maintenance Security Sewing Department Department Department Department 800 2,000 8,400 9,600 $2,000 $1,470 $3,000 $5,000 $15,680 $67,000 $84,000 Cutting Determine the total cost of each production department after allocating all support department costs to the production departments using the reciprocal services method. Production departments' total costs Cutting Sewing Department Department x x
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Transcribed Image Text:Support department cost allocation-reciprocal services method
Davis Snowflake & Co. produces Christmas stockings in its Cutting and Sewing departments. The Maintenance and Security departments support the production of the stockings. Costs from the Maintenance Department are allocated based on machine hours, and costs
from the Security Department are allocated based on asset value. Information about each department is provided in the following table:
Machine hours
Asset value
Department cost $35,280
Maintenance Security
Sewing
Department Department Department Department
800
2,000
8,400
9,600
$2,000
$1,470 $3,000 $5,000
$15,680 $67,000 $84,000
Cutting
Determine the total cost of each production department after allocating all support department costs to the production departments using the reciprocal services method.
Production
departments' total
costs
Cutting
Sewing
Department Department
x
x
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