Data table 25,000 hours Practical capacity Fixed costs of the Engineering Services Department in the 13,000 labor-hour to 25,000 labor-hour relevant range Budgeted usage (quantity) of engineering services labor-hours required to support the productions departments: Machining department $350,000 5,000 hours 9,000 hours Assembly department 14,000 hours $55 per hour used Total Budgeted variable cost per engineering services labor-hour in the 13,000 labor-hour to 25,000 labor-hour relevant range Actual usage (quantity) of engineering services labor-hours required to support the production departments: Machining department Assembly department 4,500 hours 8,500 hours 13,000 hours Total Ancaster Corporation has one support department Engineering Services, and two production departments, Machining and Assembly. The following data relate to the 2017 budget for the Engineering Services Department: (Click the icon to view the budget data for 2017.) Read the requirements Requirement 1. Using the single-rate method, calculate the cost to be allocated to the Machining and Assembly Departments if the allocation rate is based on budgeted costs and budgeted quantity of Engineering Services and allocated based on actual Engineering Services hours used in each department. Begin by determining the rate per hour used to allocate engineering services department costs to the machining and assembly departments Budgeted total rate per hour is Now, we can allocate the engineering-services costs to the machining and assembly departments, under the single-rate method. Machining department: Assembly department Requirement 2. Using the dual-rate method, calculate the cost to be allocated to the Machining and Assembly Departments if (a) variable costs are allocated based on the budgeted variable cost per hour for actual hours used in each department and (b) fixed costs are allocated based on budgeted fixed costs per hour and the budgeted number of hours for each department. Before completing the allocation, calculate the budgeted fixed cost rate per hour. Budgeted fixed cost rate per hour is Now we can complete the allocation. Begin with the Machining Department. Fixed costs Variable costs Total costs Now, allocate the costs to the Assembly Department Fixed costs Variable costs Total costs Requirement 3. Using the single-rate method, calculate the cost to be allocated to the Machining and Assembly Departments if the allocation rate is based on budgeted costs and practical capacity of Engineering Services Department and allocated based on actual Engineering Services hours used in each department. Begin by determining the budgeted total-cost rate per hour. (Round your answer to the nearest cent.) Budgeted total-cost rate per hour is Now, we can allocate the engineering-services costs to the machining and assembly departments, under the single-rate method, based on actual hours used in each department. Machining department: Assembly department: Requirement 4. Using the dual-rate method, calculate the cost to be allocated to the Machining and Assembly Departments if (a) variable costs are allocated based on the budgeted variable cost per hour for actual hours used in each department and (b) the fixed-cost allocation rate is based on budgeted costs and practical capacity of Engineering Services Department and allocated based on budgeted Engineering Services hours used in each department. Begin with the Machining Department. Fixed costs Variable costs Total costs Now, allocate the costs to the Assembly Department. Fixed costs Variable costs Total costs
