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Support Department Cost Allocation - Reciprocal Services Method Blue Africa Inc. prodoces laptops and desktop computers. The company production activities mainly occur in what the

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Support Department Cost Allocation - Reciprocal Services Method Blue Africa Inc. prodoces laptops and desktop computers. The company production activities mainly occur in what the company calls its later and Farming departments. The cafeteria and Security departments support the company production activities and stocate costs based on the number of employees and square feet, respectively. The total cost of the Security Departments 5241,000. The total cost of the cafeteria Department is $500,000. The number of employees and the square footage in tath department are as follows Employees Square Feet Security Department 10 570 Cafeteria Department 26 2.400 Laser Department -40 4,000 Forming Department 30 1.600 Using the reciprocal services method of support department cost allocation determine the total costs from the Security Department that should be allocated to the cafeteria Department and to each of the production departments Cafeteria Laser Forming Department Department Department Security Department cost allocation 49,022 X MW The reciprocal services method considers all inter support department services, and thus is the most accurate of the three support department location methods. The proportional usage of each support department's cost driver by the other departments to which it costs are to be located must be determined. Then the support department couts are located simultaneously among the departments Previous Check My Work 2 ore Chew

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