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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.

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.

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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EX 19-3 Support department cost allocation-reciprocal services method Obj. 3 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 $273,000. The total cost of the Cafeteria Department is $180,000. The number of employees and the square footage in each department are as follows: Security Department Cafeteria Department Laser Department Forming Department Employees 10 24 40 50 Square Feet 590 2,400 4,000 1,600 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.
Transcribed Image Text:EX 19-3 Support department cost allocation-reciprocal services method Obj. 3 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 $273,000. The total cost of the Cafeteria Department is $180,000. The number of employees and the square footage in each department are as follows: Security Department Cafeteria Department Laser Department Forming Department Employees 10 24 40 50 Square Feet 590 2,400 4,000 1,600 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.
services method Obj. 3 EX 19-6 Support department cost allocation-reciprocal Davis Snowflake & Co. produces Christmas stockings in its Cutting and Sewing departments. The Maintenance and Security departments support the production of the stockings. 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 Security Department 800 $2,000 $36,000 Cutting Department Machine hours Asset value Department cost Determine the total cost of each production department after allocating all support department costs to the production departments using the reciprocal services method. 2,000 $1,670 $16,000 7,200 $2,500 $64,000 Sewing Department 10,800 $5,500 $82,000
Transcribed Image Text:services method Obj. 3 EX 19-6 Support department cost allocation-reciprocal Davis Snowflake & Co. produces Christmas stockings in its Cutting and Sewing departments. The Maintenance and Security departments support the production of the stockings. 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 Security Department 800 $2,000 $36,000 Cutting Department Machine hours Asset value Department cost Determine the total cost of each production department after allocating all support department costs to the production departments using the reciprocal services method. 2,000 $1,670 $16,000 7,200 $2,500 $64,000 Sewing Department 10,800 $5,500 $82,000
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