Question

Midland Resources has two production departments (Fabrication and Assembly) and three service departments (Engineering, Administration, and...

Midland Resources has two production departments (Fabrication and Assembly) and three service departments (Engineering, Administration, and Maintenance). During July, the following costs and service department usage ratios were recorded.

Supplying Department Using Department
Engineering Administration Maintenance Fabrication Assembly
Engineering 0 50 % 0 10 % 40 %
Administration 10 % 0 20 % 50 % 20 %
Maintenance 0 50 % 0 20 % 30 %
Direct cost $ 24,000 $ 179,500 $ 25,000 $ 185,000 $ 50,000

  
Required:

Allocate the service department costs to the two operating departments using the reciprocal method

this is all the information that was given to me.

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