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Reciprocal Method of Support Department Cost Allocation Chekov Company has two support departments, Human Resources and General Factory, and two producing departments, Fabricating and Assembly.
Reciprocal Method of Support Department Cost Allocation
Chekov Company has two support departments, Human Resources and General Factory, and two producing departments, Fabricating and Assembly.
Support Departments Producing Departments
Human
Resources General
Factory Fabricating Assembly
Direct costs $ $ $ $
Normal activity:
Number of employees
Square footage
The costs of the Human Resources Department are allocated on the basis of number of employees, and the costs of General Factory are allocated on the basis of square footage.
Now assume that Chekov Company uses the reciprocal method to allocate support department costs.
Required:
Calculate the allocation ratios rounded to four significant digits for the four departments using the reciprocal method. If an amount is zero, enter Use the rounded values for subsequent calculations.
Proportion of Driver Used by
Human Resources General Factory Fabricating Assembly
Human Resources fill in the blank
fill in the blank
fill in the blank
fill in the blank
General Factory fill in the blank
fill in the blank
fill in the blank
fill in the blank
Develop a simultaneous equations system of total costs for the support departments. If required, round your answers to four decimal places. Use these numbers for subsequent calculations. If required, round all other intermediate calculations to six decimal places, except the answers computed in requirement
Human Resources HR $fill in the blank
fill in the blank
GF
General Factory GF $fill in the blank
fill in the blank
HR
Solve for the total reciprocated costs of each support department. Round reciprocated total costs to the nearest dollar.
Human Resources HR $fill in the blank
General Factory GF $fill in the blank
Using the reciprocal method, allocate the costs of the Human Resources and General Factory departments to the Fabricating and Assembly departments. Round all allocated costs to the nearest dollar. If an amount is zero, enter Note: There may be a $ difference due to intermediate rounding.
Support Departments Producing Departments
Human Resources General Factory Fabricating Assembly
Direct costs $fill in the blank
$fill in the blank
$fill in the blank
$fill in the blank
Allocate:
Human Resources fill in the blank
fill in the blank
fill in the blank
fill in the blank
General Factory fill in the blank
fill in the blank
fill in the blank
fill in the blank
Total after allocation $fill in the blank
$fill in the blank
$fill in the blank
$fill in the blank
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