University Printers has two service departments (Maintenance and Personnel) and two operating departments (Printing and Developing). Management has decided to allocate maintenance costs on the basis of machine-hours in each department and personnel costs on the basis of labor-hours worked by the employees in each. The following data appear in the company records for the current period: Machine-hours Labor-hours Department direct costs 500 $5,000 Maintenance Personnel Printing 1,000 1,000 500 $12,000 $15,000 Developing 3,000 2,000 $10,000 Required: Allocate the service department costs using the reciprocal method. (Matrix algebra is not required because there are only two service departments.) (Negative amounts should be indicated by a minus sign. Do not round intermediate calculations. Round your final answers to the nearest whole dollar amounts.)

FINANCIAL ACCOUNTING
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ISBN:9781259964947
Author:Libby
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Chapter1: Financial Statements And Business Decisions
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University Printers has two service departments (Maintenance and Personnel) and two operating departments (Printing and
Developing). Management has decided to allocate maintenance costs on the basis of machine-hours in each department and
personnel costs on the basis of labor-hours worked by the employees in each.
The following data appear in the company records for the current period:
Maintenance
Machine-hours
Labor-hours
Department direct costs
500
$5,000
Personnel
1,000
$12,000
Printing
1,000
500
Developing
3,000
$15,000
2,000
$10,000
Required:
Allocate the service department costs using the reciprocal method. (Matrix algebra is not required because there are only two service
departments.) (Negative amounts should be indicated by a minus sign. Do not round intermediate calculations. Round your final
answers to the nearest whole dollar amounts.)
From:
Maintenance
Cost Allocation To:
Personnel
Printing
Developing
Service department costs
$
5,000 $ 12,000
Maintenance
Personnel
Total
$
5,000 $ 12,000 $
0
$
0
Transcribed Image Text:University Printers has two service departments (Maintenance and Personnel) and two operating departments (Printing and Developing). Management has decided to allocate maintenance costs on the basis of machine-hours in each department and personnel costs on the basis of labor-hours worked by the employees in each. The following data appear in the company records for the current period: Maintenance Machine-hours Labor-hours Department direct costs 500 $5,000 Personnel 1,000 $12,000 Printing 1,000 500 Developing 3,000 $15,000 2,000 $10,000 Required: Allocate the service department costs using the reciprocal method. (Matrix algebra is not required because there are only two service departments.) (Negative amounts should be indicated by a minus sign. Do not round intermediate calculations. Round your final answers to the nearest whole dollar amounts.) From: Maintenance Cost Allocation To: Personnel Printing Developing Service department costs $ 5,000 $ 12,000 Maintenance Personnel Total $ 5,000 $ 12,000 $ 0 $ 0
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