Question: I think I keep confusing myself between direct and reciprocal method. Please explain with details so I can see what I am doing wrong. Thank

I think I keep confusing myself between direct and reciprocal method. Please explain with details so I can see what I am doing wrong. Thank you.

I think I keep confusing myself between direct and reciprocal method. Please

University Printers has two service departments (Maintenance and Personnel) and two operating departments (Printing and Developing). Management has decided to allocate maintenance costs on the basis of machine-hours in each department and personnel costs on the basis of labor-hours worked by the employees in each. The following data appear in the company records for the current period: Maintenance Personnel 1,000 Machine-hours Labor-hours Department direct costs Printing 1,000 500 $15,000 Developing 3,000 2,000 $10,000 500 $ 5,000 $12,000 Required: Use the direct method to allocate these service department costs to the operating departments. (Negative amounts should be indicated by a minus sign. Do not round intermediate calculations.) Printing Developing 0 Maintenance Personnel $ 5,000 $ 12,000 (5,000) 0 Service department costs Maintenance allocation Personnel allocation 0 0 Total costs allocated $ 0 $ 12,000 $ 0 $ 0

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Students Have Also Explored These Related Accounting Questions!