00:02
We have to perform the reciprocal allocation method.
00:06
So we'll use a step -by -step approach.
00:09
So let's denote the allocation as follows q is quality control control r is repair f is fabricating if i n is finishing.
00:42
So first we need to allocate from service to production department based on direct cost.
00:49
So q is equal to 0 .2 multiplied by dollar 42 ,000, which is equal to dollar 8400.
01:00
Then r is equal to 0 .3 multiplied by dollar 42 ,000, which is equal to we get dollar 12 ,600.
01:11
Then next we need to allocate from production to service departments based on services used.
01:17
So f is equal to 0 .3 multiplied by dollar 78 ,400, which is equal to dollar 23 ,520.
01:31
If i n is equal to 0 .5 multiplied by dollar 78 ,400.
01:38
So evaluating it we get dollar 39 ,200.
01:46
Now reciprocal steps is first.
01:49
We have to add the amounts to you and r that is 8400 added to 12 ,600 evaluating it...