Question
Maser Productions, a film production company, allocates support activity costs to production activities using the reciprocal services method. Specifically, the costs from two support activities,
Maser Productions, a film production company, allocates support activity costs to production activities using the reciprocal services method. Specifically, the costs from two support activities, security and meals, are allocated to the production activities of filming and makeup. Costs distributed to each department are provided in the following table, as are driver levels for each of the two support activities. Note that the security costs will be allocated based on asset value, and meal costs will be allocated based on headcount.
Specifics | Security | Meals | Filming | Makeup |
Asset value | $8,000 | $100,000 | $850,000 | $10,000 |
Headcount | 10 | 5 | 25 | 15 |
Department cost | $250,000 | $465,000 | $750,000 |
|
a.What is the total cost to be allocated from Meals to the other three departments after all support department cost allocations are made?
b.What is the total cost to be allocated from Security to the other three departments after all support department cost allocations are made?
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