Cost Allocation: Reciprocal Method
Refer to the data for University Printers in Exercise 11 24.
Required
Allocate the service department costs using the reciprocal method. (Matrix algebra is not required because there are only two service departments.)
Exercise 11 24 Cost Allocation: Direct Method
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 |
Personnel |
Printing |
Developing |
|
Machine hours |
— |
1,000 |
1,000 |
3,000 |
|
Labor hours |
500 |
— |
500 |
2,000 |
|
Department direct costs |
$15,000 |
$36,000 |
$45,000 |
$30,000 |
Required
Use the direct method to allocate these service department costs to the operating departments