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Dear Students There are 2 questions on the application of the reciprocal method of cost allocation which you have leared in part 2 of the cost allocation methodology lecture. You are required to solve them all. Total marks are 40 Question 1 Marks 20 A company has two service departments and two producing departments. The two service departments provide service not only to two producing departments but also one another. The costs of four departments and the relationship among them is shown below: DEPARTMENT Producing dept. A Producing dept. B Service dept. Y Service dept. Z Total dept. overhead DEPARTMENTAL SERVICES PROVIDED OVERHEAD BEFORE DISTRIBUTION Dept. Y Dept. 2 $12.000 40% 20% 16.000 40% 50% 7.260 30% 4.000 20% $39.260 100% 100% Required: Allocate the cost of service departments in producing departments using reciprocal algebraic methods. Question 2 Marks 20 Reciprocal Cost Allocation E-books, an online book retailer, has two operating department Corporate Sales and Consumer Sales and to support departments - Human Resources and Information Systems. Each was department conducts merchandising and marketing operations independently books se number of employees to allocate Human Resources conta and processing time to allocate Information Systems costs. The following data are available for the year 3 SUPPORT DEPARTMENTS Human Information Red OPERATING DEPARTMENTS Corper Crew Sa 12.00 20. 2 3 tednud 4 to location Sport work by Human 5 Depan 6 Bucumber compor Support work by information 2. Sama Department dried procening time in 21 11 TO Required: Allocate the cost of support departments in producing departments using reciprocal algebraic methods