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
Direct overhead	$470,000	$190,000	$46,000	$78,000
Square footage		2,500	5,000	5,000
Number of receiving orders	320		1,700	1,300
Direct labor hours			30,000	42,000

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 allocated costs to the nearest dollar. Use the rounded values for subsequent calculations

Using direct labor hours, compute departmental overhead rates. (Round to the nearest cent.)