Wilner Airlines has two operating departments (Freight and Passenger) and two service centers (Maintenance and Administration). The following table shows June 1998 data:

Maintenance costs are allocated using labor hours, while Administration costs are allocated using number of employees.

Required:
Using the reciprocal method, allocate the costs of the service centers to the operating departments.

Transcribed Image Text:

Service Centers Maintenance Operating Departments Administration $950,000 9,000 Freight $1,800,500 30,000 Passenger $5,260,470 40 50 80 51,000 200 Costs Labor hours Number of employees $630,000 8,000