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Hi, can you please help me on part C? I am stuck on figuring out how to do the reciprocal method, its confusing to me.
Hi, can you please help me on part C? I am stuck on figuring out how to do the reciprocal method, its confusing to me. Thank you in advance.
Problem 7-35 Departmental Cost Allocation (LO 7-3] Logan Products has two production departments-assembly and finishing. These are supported by two service departments-sourcing (purchasing and handling of materials and human resources) and operations (work scheduling, supervision, and inspection). Logan has the following labor hours devoted by each of the service departments to the other departments. Sourcing Operations Total Labor Hours Used by Departments Sourcing Operations Assembly Finishing 20,000 40,000 60,000 10,000 60,000 50,000 The costs incurred in the plant are as follows: Departments Sourcing Operations Assembly Finishing Total Departmental Costs $ 207,000 275,000 438,000 283,000 $1,203,000 Required: Use four decimal places (e.g., 33.3333%) in your calculation of percentages. 1. What are the costs allocated to the two production departments using (a) the direct method, (b) the step method, when the sourcing department that provides the greatest percentage of services to other service departments goes first), and (c) the reciprocal method? 2. What are the total costs in the production departments after allocation? (For all requirements, do not round intermediate calculations. Round your final answer to nearest whole dollar amount.) (For all requirements, do not rouna intermediate calculations. Round your final answ X Answer is not complete. Total Service Dept. Cost Allocated Total Production Cost $ 232,800 249,200 670,800 532,200 Direct Method Assembly Finishing Step Method Assembly Finishing Reciprocal Method Assembly Finishing 237,818 244,181 675,818 527,181 SE 207000 + 112 0-15,000 2015 275000 I 27/125 IS = 207000 + 1/12.2275 000 + 21125) ISE 207.000 + 1/12 1275000 + IS P =207000 t, 1275000) 72 1244 704 + 2 = 276000 - 276000 S (4/12)S (6/12 JS
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