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Problem - Brewster Toymakers Inc. produces toys for children. The toys are produced in the Molding and Assembly departments. The Janitorial and Security departments support the production of the toys. Costs from the Janitorial Department are allocated based on square feet. Costs from the Security Department are allocated based on asset value. Relevant department information is provided in the following table:
Janitorial Department
Security Department
Molding Department
Assembly Department
Square feet
650
1,600
4,800
Asset value
$200
$220
$1,800
$2,000
Department cost
$1,600
$10,800
$12,200
Using the reciprocal services method of support department cost allocation, determine
(a) the percentage of Janitorial costs that should be allocated to the Security Department
(b) the percentage of Security costs that should be allocated to the Janitorial Department.
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