Support Department Cost Allocation—Reciprocal Services MethodBrewster Toymakers Inc. produces toys for children. The toys are produced in the Molding and Assembly departments. The Janitorial and Security departments support the production of the toys. Costs from the Janitorial Department are allocated based on square feet. Costs from the Security Department are allocated based on asset value. Relevant department information is provided in the following table: Janitorial Department SecurityDepartment MoldingDepartment AssemblyDepartmentSquare feet600    900    900    7,200   Asset value$400    $420    $2,100    $2,500   Department cost$1,700    $1,400    $10,400    $12,500   Using the reciprocal services method of support department cost allocation, determine:a. The percentage of Janitorial costs that should be allocated to the Security Department. %b. The percentage of Security costs that should be allocated to the Janitorial Department. %

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Asked Oct 23, 2019
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Support Department Cost Allocation—Reciprocal Services Method

Brewster Toymakers Inc. produces toys for children. The toys are produced in the Molding and Assembly departments. The Janitorial and Security departments support the production of the toys. Costs from the Janitorial Department are allocated based on square feet. Costs from the Security Department are allocated based on asset value. Relevant department information is provided in the following table:

  Janitorial
Department
  Security
Department
  Molding
Department
  Assembly
Department
Square feet 600      900      900      7,200   
Asset value $400      $420      $2,100      $2,500   
Department cost $1,700      $1,400      $10,400      $12,500   

Using the reciprocal services method of support department cost allocation, determine:

a. The percentage of Janitorial costs that should be allocated to the Security Department.
%

b. The percentage of Security costs that should be allocated to the Janitorial Department.
%

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Expert Answer

Step 1

a. Calculate the percentage of janitorial cost that should be allocated to the security department.

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Area of security department (Square feet) x 100 Janitorial costs percentage Complete area (Square feet) 900 x1 00 900+900 7,200 900 x 100 9,000 =10%

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Step 2

b. Calculate the percentage of security cost that should be a...

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Assets of janitorial department Security costs percentage = 100 Complete assets $400 x100 $400+$2.100+$2,500 $400 x100 $5,000 8%

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