1)Allocate support department costs using the direct method. What is the total overhead cost for Fabricating Department? (Use full decimal for your workings)

2)Using the total overhead costs calculated above, calculate the overhead rate per machine hour for the Fabricating Department under the direct method.

ST Ltd is developing departmental overhead rates based on machine hours for its Fabricating Department and direct labour hours for its Welding Department. The Fabricating department has 50 machines, each of which runs 1,655 hours per year. The Welding Department employs 100 people, and each person works 1,400 hours per year. The production departments' overhead rates cannot be determined until the support departments' costs are allocated. Costs of the Repairs Department are allocated based on repair hours. Costs of the Engineering Department are allocated based on kilowatt-hours. The following schedule shows the costs and the use of the Repairs and Engineering Departments' output by the various departments. Support Production Repairs Engineering Fabricating Welding Overhead costs $60 000 $400 000 $300 000 $350 000 Services used Repair hours 980 1 000 2 000 8 000 Kilowatt-hours 240 000 180 000 840 000 120 000 N ST Ltd allocates support department costs using the direct method