Question
Calculating Departmental Overhead Rates Using Post-Allocation Costs Valron Company has two support departments, Human Resources and General Factory, and two producing departments, Fabricating and Assembly.
Calculating Departmental Overhead Rates Using Post-Allocation Costs Valron Company has two support departments, Human Resources and General Factory, and two producing departments, Fabricating and Assembly. Support Departments Producing Departments Human Resources General Factory Fabricating Assembly Direct costs $165,000 $390,000 $114,500 $97,000 Normal activity: Number of employees 75 35 65 Square footage 1,600 4,000 16,000
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. Valron 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 86,000 machine hours. The Assembly Department overhead rate is based on normal activity of 165,000 direct labor hours.
Job 316 required nine machine hours in Fabricating and three direct labor hours in Assembly. Total direct materials cost $140, and total direct labor cost was $70.
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 $fill in the blank 1 per mach. hr. Assembly department $fill in the blank 2 per DLH
2. Using the overhead rates calculated in Requirement 1, calculate the cost of Job 316. If required, round your answer to the nearest cent. $fill in the blank 3
3. What if Job 316 had required one machine hour in Fabricating and three direct labor hours in Assembly? Direct labor and direct materials costs remained the same. Calculate the new cost of Job 316. If required, round your answer to the nearest cent. $fill in the blank 4
Step by Step Solution
There are 3 Steps involved in it
Step: 1
![blur-text-image](https://dsd5zvtm8ll6.cloudfront.net/includes/images/document_product_info/blur-text-image.webp)
Get Instant Access with AI-Powered Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
![blur-text-image](https://dsd5zvtm8ll6.cloudfront.net/includes/images/document_product_info/blur-subtext-image.webp)
Step: 3
![blur-text-image](https://dsd5zvtm8ll6.cloudfront.net/includes/images/document_product_info/blur-subtext-image.webp)
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started