Support Department Cost Allocation—Reciprocal Services MethodBrewster Toymakers Inc. produces toys for children. The toys are produced in the Molding and Assembly departments. The Janitorial and Security departments support the production of the toys. Costs from the Janitorial Department are allocated based on square feet. Costs from the Security Department are allocated based on asset value. Relevant department information is provided in the following table: Janitorial Department SecurityDepartment MoldingDepartment AssemblyDepartmentSquare feet600 900 900 7,200 Asset value$400 $420 $2,100 $2,500 Department cost$1,700 $1,400 $10,400 $12,500 Using the reciprocal services method of support department cost allocation, determine:a. The percentage of Janitorial costs that should be allocated to the Security Department. %b. The percentage of Security costs that should be allocated to the Janitorial Department. %

a. Calculate the percentage of janitorial cost that should be allocated to the security department.

Answered: Support Department Cost…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

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Support Department Cost Allocation—Reciprocal Services Method

Brewster Toymakers Inc. produces toys for children. The toys are produced in the Molding and Assembly departments. The Janitorial and Security departments support the production of the toys. Costs from the Janitorial Department are allocated based on square feet. Costs from the Security Department are allocated based on asset value. Relevant department information is provided in the following table:

	Janitorial Department	Security Department	Molding Department	Assembly Department
Square feet	600	900	900	7,200
Asset value	$400	$420	$2,100	$2,500
Department cost	$1,700	$1,400	$10,400	$12,500

Using the reciprocal services method of support department cost allocation, determine:

a. The percentage of Janitorial costs that should be allocated to the Security Department.
%

b. The percentage of Security costs that should be allocated to the Janitorial Department.
%

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