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E3-10B. Service Department CostAllocation Presented below are certain operating data for the four depart- ments of Modern Manufacturing Company. Service Production 1 2 1 2

E3-10B. Service Department CostAllocation Presented below are certain operating data for the four depart- ments of Modern Manufacturing Company.

Service Production

1 2 1 2

Total overhead cost either identifiable with

or to each department . . . . . . . . . . . . . . . . . . $45,000 $60,000 $55,000 $116,000

Square feet of factory floor space . . . . . . . . . . . . . . 90,000 45,000

Number of factory workers. . . . . . . . . . . . . . . . . . . . 20 60

Planned direct labor hours for the year . . . . . . . . . . 25,000 32,000

Allocate, to the two production departments, the costs of service departments 1 and 2, using factory floor space and number of workers, respectively, as bases.

What is the apparent manufacturing overhead rate for each production department if planned direct labor hours are the overhead application base?

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