chap 7 hw

Direct Method and Overhead Rates Belami Company manufactures both shampoo and conditioner, with each product manufactured in separate departments. Three support departments support the production departments: Power, General Factory, and Purchasing. Budgeted data on the five departments are as follows: Support Departments Producing Departments General Factory Power Conditioner Purchasing $150,000 Shampoo $146,000 Overhead $94,000 $430,000 $170,000 Square feet 3,000 3,000 9,600 8.400 Machine hours - 1,403 1,345 8.000 24,000 Purchase orders 20 40 7 60 120 The company does not break overhead into fixed and variable compunents. The bases for allocation are power-machine hours; general factory-square feet; and purchasing-purchase orders Required: 1. Allocate the overhead costs to the producing departments using the direct method. If required, round your allocation ratios to four decimal places and round allocated costs to the nearest dollar and use the rounded values for the subsequent calculations. Allocation ratios: Shampoo Conditioner Square feet 229,333 X Machine hours Purchase orders Cost assignment: Shampoo Conditioner Direct costs Power General Factory Purchasing Total 2. Using machine hours, compute departmental overhead rates. (Round the overhead rates to the nearest cent.) Departmental overhead rates Shampoo per machine hour Conditioner per machine hour