Direct Method, Reciprocal Method, Overhead Rates Macalister Corporation is developing departmental overhead rates based on direct labor hours for its two production departmentsMolding and Assembly The Molding Department employs 23 people, and the Assembly Department employs 78 people Each person in these two departments works 2,150 hours per year The production related overhead costs for the Molding Department are budgeted at $186,000, and the Assembly Department costs are budgeted at $84,000 Two support departmentsEngineering and General Factorydirectly support the two production departments and have budgeted costs of $204,000 and $370,000, respectively The production departments overhead rates cannot be determined until the support departments costs are properly allocated The following schedule reflects the use of the Engineering Departments and General Factory Departments output by the various departments Engineering General Factory Molding Assembly Engineering hours 2,400 2,400 7,600 Square feet 101,340 377,210 84,450 For all requirements, round allocation ratios to four significant digits and round allocated costs to the nearest dollar Required 1 Calculate the overhead rates per direct labor hour for the Molding Department and the Assembly Department using the direct allocation method to charge the production departments for support department costs Round final answers to the nearest cent Overhead rate per DLH Molding $ Assembly $ 2 Calculate the overhead rates per direct labor hour for the Molding Department and the Assembly Department using the reciprocal method to charge support department costs to each other and to the production departments Round final answers to the nearest cent Round your intermediate calculations to four decimal places Overhead rate per DLH Molding $ Assembly $

The Answer is in the image, click to view ...

Answered step by step

Verified Expert Solution

Link Copied!

Question

1 Approved Answer

Posted on Sep 23, 2024

Direct Method, Reciprocal Method, Overhead Rates Macalister Corporation is developing departmental overhead rates based on direct labor hours for its two production departmentsMolding and Assembly.

Direct Method, Reciprocal Method, Overhead Rates

Macalister Corporation is developing departmental overhead rates based on direct labor hours for its two production departmentsMolding and Assembly. The Molding Department employs 23 people, and the Assembly Department employs 78 people. Each person in these two departments works 2,150 hours per year. The production-related overhead costs for the Molding Department are budgeted at $186,000, and the Assembly Department costs are budgeted at $84,000. Two support departmentsEngineering and General Factorydirectly support the two production departments and have budgeted costs of $204,000 and $370,000, respectively. The production departments overhead rates cannot be determined until the support departments costs are properly allocated. The following schedule reflects the use of the Engineering Departments and General Factory Departments output by the various departments.

	Engineering	General Factory	Molding	Assembly
Engineering hours		2,400	2,400	7,600
Square feet	101,340		377,210	84,450

For all requirements, round allocation ratios to four significant digits and round allocated costs to the nearest dollar.

Required:

1. Calculate the overhead rates per direct labor hour for the Molding Department and the Assembly Department using the direct allocation method to charge the production departments for support department costs. Round final answers to the nearest cent.

	Overhead rate per DLH
Molding	$
Assembly	$

2. Calculate the overhead rates per direct labor hour for the Molding Department and the Assembly Department using the reciprocal method to charge support department costs to each other and to the production departments. Round final answers to the nearest cent. Round your intermediate calculations to four decimal places.