What will the salons costs be for these five items at

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Unformatted text preview: respective departments. Exhibit A1 shows how the initial data for the company might look. _________________________________________________________________________________________________________ Exhibit A1. Basic Information for a Reciprocal Cost Allocation Administration Basic Information: Area occupied (square feet) Labor hours Production center costs ($000) Service center costs ($000) Total costs ($000) Maintenance 1,000 -- -100 $1,200 Two-Day Next-Day Delivery Delivery $2,400 1,000 100 $1,500 3,000 400 $4,000 Totals 5,000 600 $5,500 3,600 $9,100 _________________________________________________________________________________________________________ Note that there are no square feet shown for maintenance and no labor hours shown for administration. Since we are using square feet as the basis of allocation for maintenance, and labor hours as the basis of allocation for administration, we therefore exclude these measures from the two departments. In effect, we do not calculate the cost of maintaining the maintenance departm...
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This document was uploaded on 03/30/2014.

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