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 $259,000. The total cost of the Cafeteria Department is $320,000. The number of employees and the square footage in each department are as follows: Employees Square Feet Security Department 10 510 Cafeteria Department 24 2,400 Laser Department 40 4,000 Forming Department 50 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. Cafeteria Department Laser Department Forming Department Security Department cost allocation $fill in the blank 1 $fill in the blank 2 $fill in the blank 3

Algebra and Trigonometry (6th Edition)

6th Edition

ISBN:9780134463216

Author:Robert F. Blitzer

Publisher:Robert F. Blitzer

ChapterP: Prerequisites: Fundamental Concepts Of Algebra

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Problem 1MCCP: In Exercises 1-25, simplify the given expression or perform the indicated operation (and simplify,...

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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 $259,000. The total cost of the Cafeteria Department is $320,000. The number of employees and the square footage in each department are as follows:

	Employees	Square Feet
Security Department	10	510
Cafeteria Department	24	2,400
Laser Department	40	4,000
Forming Department	50	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.

	Cafeteria Department		Laser Department		Forming Department
Security Department cost allocation	$fill in the blank 1		$fill in the blank 2		$fill in the blank 3

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