Question
Temple Lights, Inc. produces Hanukkah menorahs in its Cutting and Molding departments. The Maintenance and Security departments support the production of the menorahs. Costs from
Temple Lights, Inc. produces Hanukkah menorahs in its Cutting and Molding departments. The Maintenance and Security departments support the production of the menorahs. Costs from the Maintenance Department are allocated based on machine hours, and costs from the Security Department are allocated based on the asset value. Information about each department is provided in the following table:
Maintenance Department | Security Department | Cutting Department | Molding Department | |
Machine hours | 800 | 2,000 | 8,400 | 9,600 |
Asset value | $2,000 | $1,450 | $2,000 | $6,000 |
Department cost | $40,320 | $17,920 | $65,000 | $83,000 |
Determine the total cost of each production department after allocating all support department costs to the production departments using the reciprocal services method.
Cutting Department | Molding Department | |
Production departments total costs | $ | $ |
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