What is this cost allocation? Transcribed Image Text: -HourS Battery Lifel16
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a. Asset vaiue or equipment.
2. Assume that Kizzle’s management allocates Maintenance costs based on the number of service calls. Further assume that in a given
period, the Janitorial, Mixing, and Cooking activities incur 16, 40, and 24 service calls, respectively, and that the Janitorial and
Maintenance costs of that period are $3,000 and $4,200, respectively. Determine the total costs allocated from each support activity to
the other three activities uşing the reciprocal services method.
Maintenance cost allocation:
Janitorial:
%24
Mixing:
%24
Cooking:
Janitorial cost allocation:
Maintenance:
Mixing:
Cooking:
$4
3. The company is considering changing from the reciprocal service method to a simpler method. Why should the company continue with
the reciprocal service method?
a. It is complex, but more accurate.
b. It can be practiced if the company has sufficient resources and capacity.
c. The simpler cost allocation methods are less accurate.
10:51 PM
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%24
%24
%24
II
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