Brewster Toymakers Inc. produces toys for children. The toys are produced in the Molding and Assembly departments. The Janitorial and Security departments support the production of the toys. Costs from the Janitorial Department are allocated based on square feet. Costs from the Security Department are allocated based on asset value. Relevant department information is provided in the following table: Using the reciprocal services method of support department cost allocation, determine (a) the percentage of Janitorial costs that should be allocated to the Security Department and (b) the percentage of Security costs that should be allocated to the Janitorial Department.
Brewster Toymakers Inc. produces toys for children. The toys are produced in the Molding and Assembly departments. The Janitorial and Security departments support the production of the toys. Costs from the Janitorial Department are allocated based on square feet. Costs from the Security Department are allocated based on asset value. Relevant department information is provided in the following table: Using the reciprocal services method of support department cost allocation, determine (a) the percentage of Janitorial costs that should be allocated to the Security Department and (b) the percentage of Security costs that should be allocated to the Janitorial Department.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
Brewster Toymakers Inc. produces toys for children. The toys are produced in the Molding and
Assembly departments. The Janitorial and Security departments support the production of the
toys. Costs from the Janitorial Department are allocated based on square feet. Costs from the
Security Department are allocated based on asset value. Relevant department information is
provided in the following table:
Using the reciprocal services method of support department cost allocation, determine
(a) the percentage of Janitorial costs that should be allocated to the Security Department
and
(b) the percentage of Security costs that should be allocated to the Janitorial Department.
Transcribed Image Text:Janitorial
Department
Security
Department
Molding
Department
Assembly
Department
Square feet
650
1,600
1,600
4,800
Asset value
$200
$220
$1,800
$2,000
Department cost
$2,000
$1,600
$10,800
$12,200
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