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$314,000 $165,000 $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.

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