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Direct Method Eilers Company has two producing departments and two support departments. The following budgeted data pertain to these four departments Support Departments Producing Departments
Direct Method Eilers Company has two producing departments and two support departments. The following budgeted data pertain to these four departments Support Departments Producing Departments General Factory Receiving Assembly Finishing $43,000 5,400 1,680 25,000 400,000 $160,000 Direct overhead Square footage Number of receiving orders Direct labor hours $74,000 5,400 1,020 40,000 2,700 300 The company has decided to simplify its method of allocating support service costs by switching to the direct method Required 1. Allocate the costs of the support departments to the producing departments using the direct method. Round allocation ratios to four significant digits. Round aoated costs to the nearest dollar. Use the rounded values for subsequent calculations Allocation ratios
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