Aim Industries manufactures framers for large trucks within three operating units (T2, T4, and T6). Maintenance and facilities are considered the support departments. Maintenance is allocated base on maintenance hours and facilities is allocated base on square footage. Information is as follows: Instructions
a.Allocate the support department costs to the operating units using the direct method.
b.Allocate the support department costs to the operating units using the reciprocal method.
c.What is the total cost (allocated and direct) that will be reported for each operating unit under the (1) direct method, (2) reciprocal method?

Question

Aim Industries manufactures framers for large trucks within three operating units (T2, T4, and T6). Maintenance and facilities are considered the support departments. Maintenance is allocated base on maintenance hours and facilities is allocated base on square footage. Information is as follows:  Instructions 
a.Allocate the support department costs to the operating units using the direct method.
b.Allocate the support department costs to the operating units using the reciprocal method.
c.What is the total cost (allocated and direct) that will be reported for each operating unit under the (1) direct method, (2) reciprocal method?

Quizplus · Accepted Answer

The Answer of Aim Industries manufactures framers for large trucks within three operating units (T2, T4, and T6). Maintenance and facilities are considered the support departments. Maintenance is allocated base on maintenance hours and facilities is allocated base on square footage. Information is as follows:  Instructions 
a.Allocate the support department costs to the operating units using the direct method.
b.Allocate the support department costs to the operating units using the reciprocal method.
c.What is the total cost (allocated and direct) that will be reported for each operating unit under the (1) direct method, (2) reciprocal method?

Aim Industries Manufactures Framers for Large Trucks Within Three Operating