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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
Power General Factory Purchasing Pesticide Liquid Fertilizer
Overhead $90,000 $312,000 $169,000 $78,500 $107,700
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 powermachine hours; general factorysquare feet; and purchasingpurchase 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 $ $
Power
General Factory
Purchasing
Total $ $

2. Using machine hours, compute departmental overhead rates. (Round the overhead rates to the nearest cent.)

Departmental overhead rates
Pesticide $______ per machine hour
Liquid Fertilizer $______ per machine hour

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