Question
Computing departmental overhead allocation rates The Oakman Company has refined its allocation system by separating manufacturing overhead cost into two cost pool - one for
Computing departmental overhead allocation rates
The Oakman Company has refined its allocation system by separating manufacturing overhead cost into two cost pool - one for each department. The estimated cost for the Mixing Department, $510,000, will be allocated based on direct labor hours, and direct labor hours for the year are 170,000. The estimated cost for the Packaging Department, $300,000, will be allocated based on machine hours, and the estimated machine hours for the year are 40,000. In October, the company incurred 38,000 direct labor hours in the Mixing department and 10,000 machine hours in the Packaging Department.
Requirements
- Compute the predetermined overhead allocation rates for both departments. Round to two decimal places.
- Determine the total amount of overhead allocated in October
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