Question
Celestial Artistry Company is developing departmental overhead rates based on direct labor hours for its two production departments, Finishing, and Etching.The Finishing Department employs 120
Celestial Artistry Company is developing departmental overhead rates based on direct labor hours for its two production departments, Finishing, and Etching.The Finishing Department employs 120 people and the Etching Department employs 60 people.Each person in these two departments works 1,500 hours per year.The production-related overhead costs for the Finishing Department are budgeted at $330,000, and the Etching Department costs are budgeted at $280,000.Two service departments, Maintenance, and Computing, directly support the two production departments.These service departments have budgeted costs of $36,000 and $310,000, respectively.The production departments' overhead rates cannot be determined until the service departments' costs are allocated. The following schedule reflects the use of the Maintenance Department's and Computing Department's output by the various departments.
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