Support Department Cost Allocation—Reciprocal Services MethodBlue 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 $253,000. The total cost of the Cafeteria Department is $283,000. The number of employees and the square footage in each department are as follows: Employees Square FeetSecurity Department10        560        Cafeteria Department18        2,400        Laser Department40        2,400        Forming Department50        3,200        Using the reciprocal services method of support department cost allocation, determine the total costs from the Security Department that should be allocated to the Cafeteria Department and to each of the production departments. CafeteriaDepartment LaserDepartment FormingDepartmentSecurity Department cost allocation$ $ $

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Asked Oct 24, 2019
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Support Department Cost Allocation—Reciprocal Services Method

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 $253,000. The total cost of the Cafeteria Department is $283,000. The number of employees and the square footage in each department are as follows:

  Employees   Square Feet
Security Department 10          560         
Cafeteria Department 18          2,400         
Laser Department 40          2,400         
Forming Department 50          3,200         

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.

  Cafeteria
Department
  Laser
Department
  Forming
Department
Security Department cost allocation $   $   $
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