Support department cost allocation Blue Mountain Masterpieces produces pictures, paintings, and other home decor. The Printing and Framing production departments are supported by the Janitorial and Security departments. Janitorial costs are allocated to the production departments based on square feet, and security costs are allocated based on asset value. Information about these departments is detailed in the following table:
Janitorial Department Security Department Printing Department Framing Department
Square feet 760 1,040 4,230 4,770
Asset value $900 $1,240 $12,390 $8,610
Department cost $5,200 $6,600 $33,000 $29,000
Management has experimented with different support department cost allocation methods in the past. The different allocation methods did not yield large differences of cost allocation to the production departments.
1. Determine which support department cost allocation method Blue Mountain Masterpieces would most likely use to allocate its support department costs to the production departments.
a. Direct cost allocation method.
b. Sequential cost allocation method.
c. Reciprocal cost allocation method.
d. None of the above.
2. Determine the total costs allocated from each support department to each production department using the method you determined in part (1).
Printing Department Framing Department
Janitorial Department cost allocation $ $
Security Department cost allocation $ $