(Multiple cost pools) Most overhead costs at the Bedford Company can be directly traced to its operating departments: Machining and Assembly. These directly traceable costs are as follows:

In Machining, all overhead costs (direct and allocated) are applied to prod¬ ucts based on machine hours; in Assembly, the base used is direct labor hours. Information on the three products produced by the company follows:

a. Determine the amount of companywide overhead to be allocated to each of the two departments.

b. Determine the overhead application rate in each department (be sure to in¬ clude the companywide allocated overhead).

c. Determine the cost to produce one unit of each type of product using the overhead application rates developed in part b and the direct labor and ma¬ terial costs presented.

d. Prepare journal entries to reflect the cost flows for the following: 1. Assignment of overhead from Machining to 1,500 units of Product 1. 2. Assignment of overhead from Assembly to 750 units of Product 2.

LO1

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MACHINING ASSEMBLY Indirect labor costs Depreciation Other $200,000 $150,000 800,000 450,000 200,000 400,000 The following companywide costs must be allocated to the two operating departments using the bases indicated: Depreciation and insurance (square footage) $2,500,000 Utilities (machine hours) Indirect labor (direct labor hours) 80,000 450,000