I need help with the following:   Support department cost allocation—reciprocal services method Davis Snowflake & Co. produces Christmas stockings in its Cutting and Sewing departments. The Maintenance and Security departments support the production of the stockings. Costs from the Maintenance Department are allocated based on machine hours, and costs from the Security Department are allocated based on asset value. Information about each department is provided in the following table:   MaintenanceDepartment SecurityDepartment CuttingDepartment SewingDepartment Machine hours 800         2,000      6,400       11,600      Asset value $2,000         $1,420           $1,500      $6,500      Department cost $36,720         $16,320      $64,000      $84,000      Determine the total cost of each production department after allocating all support department costs to the production departments using the reciprocal services method.   CuttingDepartment   SewingDepartment Production departmentsʼ total costs $   $

Managerial Accounting
15th Edition
ISBN:9781337912020
Author:Carl Warren, Ph.d. Cma William B. Tayler
Publisher:Carl Warren, Ph.d. Cma William B. Tayler
Chapter5: Support Department And Joint Cost Allocation
Section: Chapter Questions
Problem 6E: Davis Snowflake Co. produces Christmas stockings in its Cutting and Sewing departments. The...
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Support department cost allocation—reciprocal services method

Davis Snowflake & Co. produces Christmas stockings in its Cutting and Sewing departments. The Maintenance and Security departments support the production of the stockings. Costs from the Maintenance Department are allocated based on machine hours, and costs from the Security Department are allocated based on asset value. Information about each department is provided in the following table:

  Maintenance
Department
Security
Department
Cutting
Department
Sewing
Department
Machine hours 800         2,000      6,400       11,600     
Asset value $2,000         $1,420           $1,500      $6,500     
Department cost $36,720         $16,320      $64,000      $84,000     

Determine the total cost of each production department after allocating all support department costs to the production departments using the reciprocal services method.

  Cutting
Department
  Sewing
Department
Production departmentsʼ total costs $   $
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