Landmark Systems Inc

Essay

Landmark Systems Inc.designs and manufactures global positioning navigation systems for all-terrain vehicles and water craft.It has two support departments: Design and Engineering; and, two production departments, Vehicle Systems and Water Craft Systems.The budgeted level of service relationships at the start of the year was:
Landmark Systems Inc.collects fixed costs and variable costs of each support department in separate pools.The budgeted costs for the year were:
Support department pools are combined by cost behavior for allocation purposes.Production statistics (actual)are as follows:
Required:
a.Allocate the support department fixed costs using the dual-rate method.The company policy is to use design and engineering hours as the allocation base for variable costs; and, units produced for fixed costs.(round to the nearest cent)
b.Allocate the support department fixed costs using the reciprocal method.
c.Which method is preferable? Justify your answer.