Assume that Kizzle's management allocates Maintenance costs based on the number of service calls. Further assume that in a given riod, the Janitorial, Mixing, and Cooking activities incur 16, 40, and 24 service calls, respectively, and that the Janitorial and aintenance costs of that period are $3,000 and $4,200, respectively. Determine the total costs allocated from each support activity to ne other three activities using the reciprocal services method. Maintenance cost allocation: Janitorial: 2$ Mixing: %24 Cooking: %$4 Janitorial cost allocation: Maintenance: %24 Mixing: Cooking: 3. The company is considering changing from the reciprocal service method to a simpler method. Why should the company continue with the reciprocal service method? a. It is complex, but more accurate.
Assume that Kizzle's management allocates Maintenance costs based on the number of service calls. Further assume that in a given riod, the Janitorial, Mixing, and Cooking activities incur 16, 40, and 24 service calls, respectively, and that the Janitorial and aintenance costs of that period are $3,000 and $4,200, respectively. Determine the total costs allocated from each support activity to ne other three activities using the reciprocal services method. Maintenance cost allocation: Janitorial: 2$ Mixing: %24 Cooking: %$4 Janitorial cost allocation: Maintenance: %24 Mixing: Cooking: 3. The company is considering changing from the reciprocal service method to a simpler method. Why should the company continue with the reciprocal service method? a. It is complex, but more accurate.
Managerial Accounting
15th Edition
ISBN:9781337912020
Author:Carl Warren, Ph.d. Cma William B. Tayler
Publisher:Carl Warren, Ph.d. Cma William B. Tayler
Chapter4: Activity-based Costing
Section: Chapter Questions
Problem 19E
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