Support department cost allocationreciprocal services method Davis Snowflake & Co. produces Christmas stockings in its...
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Accounting
Support department cost allocationreciprocal 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
7,200
10,800
Asset value
$2,000
$1,670
$2,500
$5,500
Department cost
$36,000
$16,000
$64,000
$82,000
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 departments total costs
$fill in the blank 1
$fill in the blank 2
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