Please assist with Req C (Reciprocal Method) Please be as detailed as possible when showing work.

College Accounting, Chapters 1-27
23rd Edition
ISBN:9781337794756
Author:HEINTZ, James A.
Publisher:HEINTZ, James A.
Chapter25: Departmental Accounting
Section: Chapter Questions
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Please assist with Req C (Reciprocal Method) Please be as detailed as possible when showing work.

Baldwin Enterprises has two service departments, Personnel and Legal, and two operating divisions, Eastern and Western. Personnel
costs are allocated on the basis of employees and Legal costs are allocated on the basis of hours. A summary of Baldwin operations
follows:
Employees
Hours
Department direct costs
Required A
Costs
Personnel
Legal
Complete this question by entering your answers in the tabs below.
Required B Required C
Total
Personnel
Personnel
$
10,800
$ 420,000
Required:
a. Allocate the cost of the service departments to the operating divisions using the direct method.
b. Allocate the cost of the service departments to the operating divisions using the step method. Start with Legal.
c. Allocate the cost of the service departments to the operating divisions using the reciprocal method.
420,000 $
$ 420,000 $
Allocate the cost of the service departments to the operating divisions using the reciprocal method.
Note: Do not round intermediate calculations. Round your final answers to the nearest whole dollar values. Amounts to be
deducted should be indicated by a minus sign.
Eastern
Legal
280,000 $ 1,320,000 $
Legal
280,000 $ 1,320,000
< Required B
40
$ 280,000
$
Western
910,000
Eastern
910,000
120
5,400
$ 1,320,000
Required C >
Western
40
1,800
$ 910,000
Transcribed Image Text:Baldwin Enterprises has two service departments, Personnel and Legal, and two operating divisions, Eastern and Western. Personnel costs are allocated on the basis of employees and Legal costs are allocated on the basis of hours. A summary of Baldwin operations follows: Employees Hours Department direct costs Required A Costs Personnel Legal Complete this question by entering your answers in the tabs below. Required B Required C Total Personnel Personnel $ 10,800 $ 420,000 Required: a. Allocate the cost of the service departments to the operating divisions using the direct method. b. Allocate the cost of the service departments to the operating divisions using the step method. Start with Legal. c. Allocate the cost of the service departments to the operating divisions using the reciprocal method. 420,000 $ $ 420,000 $ Allocate the cost of the service departments to the operating divisions using the reciprocal method. Note: Do not round intermediate calculations. Round your final answers to the nearest whole dollar values. Amounts to be deducted should be indicated by a minus sign. Eastern Legal 280,000 $ 1,320,000 $ Legal 280,000 $ 1,320,000 < Required B 40 $ 280,000 $ Western 910,000 Eastern 910,000 120 5,400 $ 1,320,000 Required C > Western 40 1,800 $ 910,000
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