Calculating Departmental Overhead Rates Using Post-Allocation Costs Chekov Company has two support departments, Human Resources and...
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Calculating Departmental Overhead Rates Using Post-Allocation Costs Chekov Company has two support departments, Human Resources and General Factory, and two producing departments, Fabricating and Assembly. Support Departments Producing Departments Direct costs Normal activity: Number of employees Square footage Human General Resources $165,000 Factory $350,000 Fabricating Assembly $114,900 $98,000 1,100 65 52.5 97.5 3,750 11,250 The costs of the Human Resources Department are allocated on the basis of number of employees, and the costs of General Factory are allocated on the basis of square footage. Chekov Company uses the direct method of support department cost allocation. Solve for the allocated costs to Fabricating and Assembly using the direct method of support department cost allocation. The Fabricating Department overhead rate is based on normal activity of 83,000 machine hours. The Assembly Department overhead rate is based on normal activity of 165,000 direct labor hours. Job 316 required six machine hours in Fabricating and four direct labor hours in Assembly. Total direct materials cost $100, and total direct labor cost was $85. Required: 1. Calculate the overhead rate for Fabricating based on machine hours and the overhead rate for Assembly based on direct labor hours. If required, round your answers to the nearest cent. Use the rounded values for subsequent calculations. Overhead Rate Fabricating department per mach. hr. per DLH Assembly department 2. Using the overhead rates calculated in Requirement 1, calculate the cost of Job 316. If required, round your answer to the nearest cent. Calculating Departmental Overhead Rates Using Post-Allocation Costs Chekov Company has two support departments, Human Resources and General Factory, and two producing departments, Fabricating and Assembly. Support Departments Producing Departments Direct costs Normal activity: Number of employees Square footage Human General Resources $165,000 Factory $350,000 Fabricating Assembly $114,900 $98,000 1,100 65 52.5 97.5 3,750 11,250 The costs of the Human Resources Department are allocated on the basis of number of employees, and the costs of General Factory are allocated on the basis of square footage. Chekov Company uses the direct method of support department cost allocation. Solve for the allocated costs to Fabricating and Assembly using the direct method of support department cost allocation. The Fabricating Department overhead rate is based on normal activity of 83,000 machine hours. The Assembly Department overhead rate is based on normal activity of 165,000 direct labor hours. Job 316 required six machine hours in Fabricating and four direct labor hours in Assembly. Total direct materials cost $100, and total direct labor cost was $85. Required: 1. Calculate the overhead rate for Fabricating based on machine hours and the overhead rate for Assembly based on direct labor hours. If required, round your answers to the nearest cent. Use the rounded values for subsequent calculations. Overhead Rate Fabricating department per mach. hr. per DLH Assembly department 2. Using the overhead rates calculated in Requirement 1, calculate the cost of Job 316. If required, round your answer to the nearest cent.
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