Question: Pfizer allocates service department costs: Administration $1,500,000, Maintenance $1,000,000, allocated to Production and Sales. Requirements: Determine allocation rates using the reciprocal method. Allocate costs to

  1. Pfizer allocates service department costs: Administration $1,500,000, Maintenance $1,000,000, allocated to Production and Sales.
    • Requirements:
      • Determine allocation rates using the reciprocal method.
      • Allocate costs to each operating department.
      • Prepare a cost allocation report.
      • Compare results with the step-down and direct methods.

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