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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
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 General Liquid Factory Purchasing Pesticide $78,800 4,200 24,000 120 Power Fertilizer $316,000 $165,000 1,500 1,345 $107,400 4,800 8,000 60 Overhead Square feet Machine hours Purchase orders 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: $90,000 1,500 1,403 20 40 Pesticide Liquid Fertilizer Direct costs 78,800 107,400 67,500 V 147,466.X 110,000.X 403,767 X Power 22,500V General Factory 168,533.X Purchasing 00,000.0 Total 353,433 X 2. Using machine hours, compute departmental overhead rates. (Round the overhead rates to the nearest cent.) Departmental overhead rates Pesticide 16.82 per machine hour Liquid Fertilizer 44.18 V per machine hour
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