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 $262,000. The total cost of the Cafeteria Department is $193,000. The number of employees and the square footage in each department are as follows: Employees Square Feet Security Department 10 520 Cafeteria Department 22 2,400 Laser Department 40 2,400 Forming Department 50 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. CafeteriaDepartment LaserDepartment FormingDepartment Security Department cost allocation $ $ $
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 $262,000. The total cost of the Cafeteria Department is $193,000. The number of employees and the square footage in each department are as follows: Employees Square Feet Security Department 10 520 Cafeteria Department 22 2,400 Laser Department 40 2,400 Forming Department 50 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. CafeteriaDepartment LaserDepartment FormingDepartment Security Department cost allocation $ $ $
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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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 $262,000. The total cost of the Cafeteria Department is $193,000. The number of employees and the square footage in each department are as follows:
| Employees | Square Feet | |||
| Security Department | 10 | 520 | ||
| Cafeteria Department | 22 | 2,400 | ||
| Laser Department | 40 | 2,400 | ||
| Forming Department | 50 | 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 |
Laser Department |
Forming Department |
|||
| Security Department cost allocation | $ | $ | $ |
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