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Exercise 11-28 Cost Allocation: Reciprocal Method (LO 11-4) Warren Ltd. has two production departments, Building A and Building B, and two service departments, Maintenance and
Exercise 11-28 Cost Allocation: Reciprocal Method (LO 11-4)
Warren Ltd. has two production departments, Building A and Building B, and two service departments, Maintenance and Cafeteria. Direct costs for each department and the proportion of service costs used by the various departments for the month of June follow:: |
Proportion of Services Used by | |||||||||||
Department | Direct Costs | Maintenance | Cafeteria | Building A | Building B | ||||||
Building A | $ | 505,000 | |||||||||
Building B | 326,000 | ||||||||||
Maintenance | 218,000 | 0.2 | 0.4 | 0.4 | |||||||
Cafeteria | 145,000 | 0.7 | 0.1 | 0.2 | |||||||
Required: |
Use the reciprocal method to allocate the service costs. (Matrix algebra is not required.) (Do not round intermediate calculations. Round your answer to the nearest dollar amount.)
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