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 Maintenance Department 800 $2,000 $37,440 Security Department Cutting Department 6,400 Holding Department 11,600 Machine hours 2,000 $1,300 $2,500 Asset value Department cost $5,500 $16,640 $65,000 181,000 Determine the total cost of each production department after allocating all support department costs to the production departments using the reciprocal services metho Production departments total costs Cutting Holding Department Department
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 Maintenance Department 800 $2,000 $37,440 Security Department Cutting Department 6,400 Holding Department 11,600 Machine hours 2,000 $1,300 $2,500 Asset value Department cost $5,500 $16,640 $65,000 181,000 Determine the total cost of each production department after allocating all support department costs to the production departments using the reciprocal services metho Production departments total costs Cutting Holding Department Department
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Po.26.
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:
Maintenance
Department
Machine hours
800
Asset value
$2,000
Department cost
$37,440
Determine the total cost of each production
Production departments total costs
Security
Department
Cutting
Department
Holding
Department
2,000
6,400
$1,380
$2,500
$16,640
$65,000
department after allocating all support department costs to the production departments using the reciprocal services method.
Cutting
Molding
Department Department
11,600
$5,500
181,000
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