The following is a summary of the service-support and operations departmnets for Clear Company: ACCT Purchasing...

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The following is a summary of the service-support and operations departmnets for Clear Company: ACCT Purchasing Assembly Pack

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Reciprocal Method	ACCT	Purchasing	Assembly	Packaging	Total
Hours used	-	2,000.00	5,700.00	2,300.00	10,000.00
Purchasing of empty	25.00	-	200.00	175.00	400.00
Hours used %	0.00%	20.00%	57.00%	23.00%	100.00%
Purchasing of empty %	6.25%	0.00%	50.00%	43.75%	100.00%
Department cost	6,200.00	3,000.00	25,000.00	30,000.00	64,200.00

Let cost of ACCT is $ X and Purchasing is $ Y

So, X= 6200+ 0.0625Y

Y= 3000+ 0.20X

Substituting the value of X in equation 2:

Y = 3000 + 0.20(6,200 + 0.0625Y)

Y = 3000 + 1240+.0125Y

Y – 0.0125Y = 3000+1,240

0.9875Y = 4,240

Y = 4,240/0.9875

Y = $ 4,294

Substituting the value of Y in equation 1:

So, X= 6200+ .00625Y

So, X= 6200+ 0.0625*4294

So, X= 6200+ 268

X= $ 6,468

Allocation Summary	ACCT	Purchasing	Assembly	Packaging	Total
Hours used %	-	20.00%	57.00%	23.00%	100.00%
Purchasing of empty %	6.25%	-	50.00%	43.75%	100.00%
Department cost	6,200.00	3,000.00	25,000.00	30,000.00	64,200.00
Allocation
ACCT	(6,468.00)	1,294.00	3,686.00	1,488.00	-
Purchasing	268.00	(4,294.00)	2,147.00	1,879.00	-
Cost after allocation	-	-	30,833.00	33,367.00	64,200.00

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The following is a summary of the service-support and operations departmnets for Clear Company: ACCT Purchasing...

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