Support department cost allocationreciprocal services method<\/p>
<\/p>
Davis Snowflake & Co. produces Christmas stockings in its Cutting and Sewing departments. The Maintenance and Security departments support the production of the stockings. Costs from the Maintenance Department are allocated based on machine hours, and costs from the Security Department are allocated based on asset value. Information about each department is provided in the following table:<\/p>
<\/p>
Maintenance Department Security Department Cutting Department Sewing Department<\/strong><\/p> Machine hours 800 2,000 8,000 10,000<\/p> Asset value $2,000 $1,380 $1,500 $6,500<\/p> Department cost $30,240 $13,440 $61,000 $84,000<\/p> <\/p> Determine the total cost of each production department: cutting department and sewing department after allocating all support department costs to the production departments using the reciprocal services method.<\/p> <\/p> <\/strong><\/p>",
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