Support department cost allocationreciprocal services method 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: Maintenance Security Cutting Sewing Department Department Department Department Machine hours 800 2,000 7,200 10,800 Asset value $2,000 $1,470 $3,500 $4,500 Department cost $41,040 $18,240 $64,000 $80,000 Determine the total cost of each production department after allocating all support department costs to the production departments using the reciprocal services method. Cutting Sewing Department Department ) Production departments total costs C X $:] X Feedback v V Check My Work The reciprocal services method considers all intersupportdepartment service, and thus is the most accurate of the three support department allocation methods. The proportional usage of each support department's cost driver by the other departments to which its costs are to be allocated must be determined. Then, the support department costs are allocated simultaneously among the departments. Joint cost allocation net realizable value method Nature's Garden Inc. produces wood chips, wood pulp, and mulch. These products are produced through harvesting trees and sending the logs through a wood chipper machine. One batch of logs produces 20,896 cubic yards of wood chips, 14,650 cubic yards of mulch, and 9,274 cubic yards of wood pulp. The joint production process costs a total of $30,000 per batch. After the splitoff point, wood chips are immediately sold for $21 per cubic yard while wood pulp and mulch are processed further. The market value of the wood pulp and mulch at the splitoff point is estimated to be $29 and $22 per cubic yard, respectively. The additional production process of the wood pulp costs $3 per cubic yard, after which it is sold for $39 per cubic yard. The additional production process of the mulch costs $2 per cubic yard, after which it is sold for $32 per cubic yard. This information has been collected in the Microsoft Excel Online file. Open the spreadsheet, perform the required analysis, and input your answers in the question below. Open spreadsheet Allocate the joint costs of production to each product using the net realizable value method. Do not round intermediate calculations. Round your answers to the nearest dollar. Joint Product Allocation Wood chips D Wood pulp :l M.... :1 Totals u- 30,000 V