6. A manufacturer serving the sea transport industry has five departments. Indirect cost allocations for 1 month are detailed below, along with space assigned, direct labor hours, and direct labor costs for each department that directly manufactures radar and sonar equipment. Determine the manufacturing department allocation rates for redistributing the indirect cost allocation for testing and engineering ($38,000) to the other departments. Use the following bases to determine the rates: (a) space, and (b) direct labor costs.

7. Indirect cost rates and bases for six producing departments at Haycrow Industries are listed below. Use them to distribute indirect costs to the departments.

Allocation

Direct

Direct Labor Cost, $

20,000 35,000 44,100 84,000 54,700 69,000

Department

Basis *

Labor Rate, $ Hours

Machine Hours

3,500 24,000 5,000 40,000 10,200 60,500

1 DLH

2 MH

3 DLC

4 DLC

5 DLC

6 DLH

2.5 5,000 0.95 5,000 1.30 10,500 5.75 12,000 3.45 10,200 0.75 19,000

DLH = direct labor hours; MH = machine hours; DLC = direct labor cost

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