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The HGF Comapny seperates its activities into two operating departments and two support departments. Support Department 1 had budgeted costs of $60,000 and Support
The HGF Comapny seperates its activities into two operating departments and two support departments. Support Department 1 had budgeted costs of $60,000 and Support Department 2 had budgeted cost of $45,000 during the month of March. HGF allocates the costs of each support department based on service hours. The table here shows how many service hours each support department provided to the two operating departments, to the other support departments, to other support department, and to itself. Support 1 Support 2 Support 1 1,800 300 Support 2 2,000 100 Operating 1 3,000 900 Operating 2 5,000 1,800 Total Service Hours Provided 11,800 3,100 If HGF uses the reciprocal method to allocate support department costs, how much will be allocated to Operating Department 1 and Operating Department 2, respectively, in March?
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The reciprocal method allocates support department costs by fully recognizing the services provided among support departments Unlike the direct or stepdown methods the reciprocal method considers the ...Get Instant Access to Expert-Tailored Solutions
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