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 Department Security Department Cutting Department Sewing Department Machine hours 800         2,000      7,600       10,400      Asset value $2,000         $1,470           $2,500      $5,500      Department cost $41,040         $18,240      $63,000      $81,000      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   Sewing Department Production departmentsʼ total costs

Johnston Company cleans and applies powder coat paint to metal items on a job-order basis. Johnston has budgeted the following amounts for various overhead categories in the coming year. Supplies $220,000 Gas 56,000 Indirect labor 172,000 Supervision 75,500 Depreciation on equipment 51,000 Depreciation on the buliding 45,000 Rental of special equipment 11,500 Electricity (for lighting, heating, and air conditioning) 28,300 Telephone 5,000 Landscaping service 1,800 Other overhead 50,000 In the coming year, Johnston expects to powder coat 140,000 units. Each unit takes 1.4 direct labor hours. Johnston has found that supplies and gas (used to run the drying ovens—all units pass through the drying ovens after powder coat paint is applied) tend to vary with the number of units produced. All other overhead categories are considered to be fixed. Required: Question Content Area 1. Calculate the number of direct labor hours Johnston must budget for the coming…

Renata Company has four departments: Materials, Personnel, Manufacturing, and Packaging. Information follows. Department Square Feet Asset Values Employees Materials 26 30,000 $ 9,300 Personnel 13 12,000 2,480 Manufacturing Packaging 52 66,000 37,820 39 12,000 12,400 Total 130 120,000 $ 62,000 The four departments share the following indirect expenses for supervision, utilities, and insurance according to their allocation bases. Indirect Expense Supervision Utilities Insurance Total Cost $ 82,700 Number of employees Allocation Base 52,000 Square feet occupied 23,500 Asset values $ 158,200 Allocate each of the three indirect expenses to the four departments.

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 asset value. Information about each department is provided in the following table: Maintenance Department Production departments' total costs Feedback Security Department 2,000 Machine hours 800 Asset value $1,390 $2,000 $37,440 Department cost $16,640 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 7,200 $2,500 $64,000 Cutting Molding Department Department X Molding Department 10,800 $5.500 $81,000 Check My Work The reciprocal services method considers all inter-support-department service, and thus is the most accurate of the three support…