Direct Method and Overhead Rates Jasmine Company manufactures both pesticide and liquid fertilizer, 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 Power General Factory Liquid Purchasing Pesticide Fertilizer Overhead $80,000 $312,000 $165,000 $78,800 $107,400 Square feet 1,500 - 1,500 4,200 4,800 Machine hours 1,403 1,345 24,000 8,000 Purchase orders 20 40 7 120 60 The company does not break overhead into fixed and variable components. 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. Cost assignment: Pesticide Liquid Fertilizer Direct costs $ 78,800 107,400 Power 60,000 20,000 General Factory 145,600 X 166,400 X Purchasing 110,000 X 55,000 X 394,400 X $ 348,800 X Total 2. Using machine hours, compute departmental overhead rates. (Round the overhead rates to the nearest cent.) Departmental overhead rates Pesticide Liquid Fertilizer Feedback 16.43 per machine hour 43.60 per machine hour Check My Work 1. Allocation = Allocation ratio x Budgeted support service costs. Needs Instructor Grading. 2. Overhead rate is computed by adding the allocated service costs to the overhead costs that are directly traceable to the producing department and dividing this total by some measure of activity, such as direct labor hours or machine hours.