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Business, 22.09.2020 20:01 Jasten

Service Department Cost Allocation Presented below are certain operating data for the four departments of Modern Manufacturing Company. Service Production
1 2 1 2
Total manufacturing overhead
costs either identifiable with
or allocated to each department $45,000 $60,000 $55,000 $116,000
Square feet of factory
floor space $90,000 $45,000
Number of factory workers 20 60
Planned direct labor hours for the year 25,000 32,000
Allocate, to the two production departments, the costs of service departments 1 and 2, using factory floor space and number of workers, respectively, as bases. Do not round bases when calculating reallocations of service departments.
Production
Departments 1 2
Identifiable and allocated overhead $55,000 $116,000
Allocation of service departments:
Dept. 1: Factory floor space $30,000 $15,000
Dept. 2: Number of factory workers $15,000 $45,000
Total manufacturing overhead $100,000 $176,000
What is the apparent overhead rate for each production department if planned direct labor hours are overhead application base?

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Service Department Cost Allocation Presented below are certain operating data for the four departmen...

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