Answer the following questions using the information below:
Dawn,owner of Fraser Fabric Pty Ltd is interested in using the reciprocal allocation method.The following data from operations were collected for analysis:
Budgeted manufacturing overhead costs:
$\begin{array} { l l l } \text { Maintenance } & \mathrm { M } \text { (Support Dept) } & \$ 150000 \ \text { Personnel } & \mathrm { P } \text { (Support Dept) } & \$ 65000 \ \text { Weaving } & \text { W(Weaving Dept) } & \$ 325000 \ \text { Colourising } & \text { C (Colourising Dept) } & \$ 175000 \end{array}$

Services furnished:
By Maintenance (budgeted labour-hours):
to Persontrel 500
to Weaving 3500
to Colourising 2000

By Personnel (number of employees serviced):
$\begin{array} { l l } \text { Plant Maintenance } & 5 \ \text { Weaving } & 15 \ \text { Colourising } & 10 \end{array}$
-What is the complete reciprocated cost of the Maintenance Department?

Question

Answer the following questions using the information below:
Dawn,owner of Fraser Fabric Pty Ltd is interested in using the reciprocal allocation method.The following data from operations were collected for analysis:
 Budgeted manufacturing overhead costs:
$\begin{array} { l l l } \text { Maintenance } & \mathrm { M } \text { (Support Dept) } & \$ 150000 \ \text { Personnel } & \mathrm { P } \text { (Support Dept) } & \$ 65000 \ \text { Weaving } & \text { W(Weaving Dept) } & \$ 325000 \ \text { Colourising } & \text { C (Colourising Dept) } & \$ 175000 \end{array}$

Services furnished:
By Maintenance (budgeted labour-hours):
to Persontrel 500
to Weaving 3500
to Colourising 2000

By Personnel (number of employees serviced):
$\begin{array} { l l } \text { Plant Maintenance } & 5 \ \text { Weaving } & 15 \ \text { Colourising } & 10 \end{array}$
-What is the complete reciprocated cost of the Maintenance Department?

Quizplus · Accepted Answer

The reciprocal allocation method considers services provided by each department to other departments. The total cost of the maintenance department after reciprocal allocation is $163 098. Option B is incorrect as it represents the original cost of the maintenance department before any allocations. Option C is also incorrect as it underestimates the cost of the maintenance department after reciprocal allocation. Option D is incorrect as there is a cost for the maintenance department.

There is no additional information provided to determine the best choice(s) for the company.

Answer the Following Questions Using the Information Below: Dawn,owner of Fraser

Answer the Following Questions Using the Information Below:
Dawn,owner of Fraser