Morris Machine Works has two support departments—power and general factory—

and two producing departments—grinding and assembly. Budgeted data for each follows:

General Power Factory Grinding Assembly Direct costs $60,000 $100,000 $103,000 $85,000 Machine hours — 1,000 8,000 2,000 Square feet 4,000 — 2,000 6,000 Direct labor hours 600 12,000 20,000 40,000 Power is allocated on the basis of machine hours; General Factory is allocated on the basis of square footage.

Required:

1. Allocate overhead costs to producing departments using the direct method.

2. Calculate departmental overhead rates, using machine hours for grinding and direct labor hours for assembly.

3. Ifa unit has prime costs of $17.50 and spends one hour in Grinding and two hours in Assembly, what is the unit cost? lop8