Support department cost allocation-reciprocal services method Temple Lights, Inc. produces Hanukkah menorahs in its Cutting and Molding departments. The Maintenance and Security departments support the production of the menorahs. 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 Maintenance Department Security Department Cutting Department Molding Department 800 2,000 7,200 10,800 $2,000 $36,720 $1,440 $16,320 $1,500 $65,000 $6,500 $81,000 Determine the total cost of each production department after allocating all support department costs to the production departments using the reciprocal services method. Cutting Department Molding Department Production departments' total costs X $ x
Support department cost allocation-reciprocal services method Temple Lights, Inc. produces Hanukkah menorahs in its Cutting and Molding departments. The Maintenance and Security departments support the production of the menorahs. 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 Maintenance Department Security Department Cutting Department Molding Department 800 2,000 7,200 10,800 $2,000 $36,720 $1,440 $16,320 $1,500 $65,000 $6,500 $81,000 Determine the total cost of each production department after allocating all support department costs to the production departments using the reciprocal services method. Cutting Department Molding Department Production departments' total costs X $ x
Chapter1: Financial Statements And Business Decisions
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Transcribed Image Text:Support department cost allocation-reciprocal services method
Temple Lights, Inc. produces Hanukkah menorahs in its Cutting and Molding departments. The Maintenance and Security departments support the production of the menorahs. 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
Maintenance
Department
Security
Department
Cutting
Department
Molding
Department
800
2,000
7,200
10,800
$2,000
$36,720
$1,440
$16,320
$1,500
$65,000
$6,500
$81,000
Determine the total cost of each production department after allocating all support department costs to the production departments using the reciprocal services method.
Cutting
Department
Molding
Department
Production departments' total costs
X $
x
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