ssume that Kizzle's management allocates Maintenance costs based on the number of servicê calls. Further assume Llla ng, and Cooking activities incur 16, 40, and 24 service calls, respectively, and that the Janitorial and Maintenance costs of that period are $3,000 and 200, respectively. Determine the total costs allocated from each support activity to the other three activities using the reciprocal services method. Intenance cost allocation: mitorial: %24 zing: oking: nitorlal cost allocation: intenance: $4 King: oking: The company is considering changing from the reciprocal service method to a simpler method. Why should the company continue with the reciprocal vice method? It is complex, but more accurate. It can be practiced if the company has sufficient resources and capacity. The simpler cost allocation methods are less accurate. All the above.
ssume that Kizzle's management allocates Maintenance costs based on the number of servicê calls. Further assume Llla ng, and Cooking activities incur 16, 40, and 24 service calls, respectively, and that the Janitorial and Maintenance costs of that period are $3,000 and 200, respectively. Determine the total costs allocated from each support activity to the other three activities using the reciprocal services method. Intenance cost allocation: mitorial: %24 zing: oking: nitorlal cost allocation: intenance: $4 King: oking: The company is considering changing from the reciprocal service method to a simpler method. Why should the company continue with the reciprocal vice method? It is complex, but more accurate. It can be practiced if the company has sufficient resources and capacity. The simpler cost allocation methods are less accurate. All the above.
Managerial Accounting
15th Edition
ISBN:9781337912020
Author:Carl Warren, Ph.d. Cma William B. Tayler
Publisher:Carl Warren, Ph.d. Cma William B. Tayler
Chapter5: Support Department And Joint Cost Allocation
Section: Chapter Questions
Problem 3BE
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