Boswell Consulting Has Two Service Departments, S1 and S2, and Three

Essay

Boswell Consulting has two service departments, S1 and S2, and three production departments, P1, P2, and P3. Data for a recent month follow:

Required:
(a) Determine the allocations to the production departments when the reciprocal method is used.
(b) Briefly describe why the reciprocal method is theoretically preferable to other methods of allocation.