The costs allocated to each cost center are as follows:Q3:Cost Centers/CostsProduction DepartmentService DepartmentTotal CostYABTotal of Primary DistributionThere is a reciprocal relationship between cost centers. X Service Cost center basedon the number of workers, Y Service Cost center will be apportioned on the base of40.000 45.000 55.000 8.000 7.160155.500m2.ABXYTotalNumber of Workersm21524.5001141.350762.70020450383004009.300a) Calculate the benefits received from each service department.b) Calculate the X Service Center's total cost subject to re-distribution.c) Calculate the Y Service Center's total cost subject to re-distribution.d) Re-allocate the cost of service cost centers

Cost Allocation - It is the process of identifying, combining and assigning cost to different…

The costs allocated to each cost center are as follows: Q3: X Y Total of Primary Distribution 40.000 45.000 55.000 8.000 7.160 Cost Centers/Costs Production Department A Service Department Total Cost 155.500 There is a reciprocal relationship between cost centers. X Service Cost center based on the number of workers, Y Service Cost center will be apportioned on the base of m2. Number of Workers m2 A 152 4.500 B 114 1.350 76 2.700 20 450 Y 38 300 Total 400 9.300 a) Calculate the benefits received from each service department. b) Calculate the X Service Center's total cost subject to re-distribution. c) Calculate the Y Service Center's total cost subject to re-distribution. d) Re-allocate the cost of service cost centers

The costs allocated to each cost center are as follows: Q3: X Y Total of Primary Distribution 40.000 45.000 55.000 8.000 7.160 Cost Centers/Costs Production Department A Service Department Total Cost 155.500 There is a reciprocal relationship between cost centers. X Service Cost center based on the number of workers, Y Service Cost center will be apportioned on the base of m2. Number of Workers m2 A 152 4.500 B 114 1.350 76 2.700 20 450 Y 38 300 Total 400 9.300 a) Calculate the benefits received from each service department. b) Calculate the X Service Center's total cost subject to re-distribution. c) Calculate the Y Service Center's total cost subject to re-distribution. d) Re-allocate the cost of service cost centers

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter7: Allocating Costs Of Support Departments And Joint Products

Section: Chapter Questions

Problem 5CE: Refer to Cornerstone Exercise 7.3. Now assume that Valron Company uses the reciprocal method to...

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