Refer to the data in Exercise 7.22. The company has decided to simplify its method of allocating support service costs by switching to the direct method.
In exercise Eilers Company has two producing departments and two support departments. The following budgeted data pertain to these four departments:

Required:
1. Allocate the costs of the support departments to the producing departments using the direct method.
2. Using direct labor hours, compute departmental overhead rates.

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Support DepartmentsProducing Departments Direct overhead Square footage Number of receiving orders Direct labor hours General Factory Receiving Assembly Finishing $160,000 $43,000 $74,000 5,400 1,020 ー 25,000 40,000 S400,000 2,700 5,400 1,680 300