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.)

	Cost Allocation to:
From:	Matintence	Cafeteria	Building A	Building B
Service Dept. Costs	$0	$0	$0	$0
Maintenance	0	0	0	0
Cafeteria	0	0	0	0
TOTAL	$0	$0	$0	$0