Cost Accounting & Cost Concepts Cost Accounting & Cost Concepts Cost Accounting
6.The reciprocal allocation method
THE FOLLOWING INFORMATION APPLIES TO QUESTIONS 49 THROUGH 51.
Jake’s Battery Company has two service departments, Maintenance and Personnel. Maintenance Department costs of P160,000 are allocated on the basis of budgeted maintenance-hours. Personnel Department costs of P40,000 are allocated based on the number of employees. The costs of operating departments A and B are P80,000 and P120,000, respectively. Data on budgeted maintenance-hours and number of employees are as follows:Support DepartmentsProduction DepartmentsMaintenanceDepartmentPersonnelDepartmentABBudgeted costsP160,000P40,000P80,000P120,000Budgeted maintenance-