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Reciprocal services method to allocate support department costs The production section of a firm is serviced by personnel and computing as follows: 6. Production Support

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Reciprocal services method to allocate support department costs

The production section of a firm is serviced by personnel and computing as follows: 6. Production Support departments departments Assembly $ 40 000 S 72 000 140 000 160 000 Personnel Computing Fabrication Budgeted overhead Labour hours Employees Service hours 16 000 15 12 000 20 000 25 8000 4000 4 5000 5000 Personnel costs are allocated on the number of employees and computing costs on service hours. Overhead rates are based on labour hours. If the reciprocal services method is used to allocate support department costs, Calculate the total cost (rounded) allocated out of Personnel. (1 mark) Calculate the total support department costs allocated to the Assembly Department (rounded) (1 mark) A. B

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