1. Epsilon Manufacturing Co.

Scenario: Overhead Allocation Based on Activity Drivers

Department Details:

• Department A:
  • Direct Costs: $400,000
  • Indirect Costs: $200,000
  • Allocation Base: Direct Labor Hours (DLH)
  • DLH Used: 20,000

• Department B:
  • Direct Costs: $350,000
  • Indirect Costs: $180,000
  • Allocation Base: Machine Hours (MH)
  • MH Used: 15,000

Requirements:

Allocate overhead costs to Department A and Department B using their respective allocation bases (DLH for A and MH for B). Present calculations and allocation tables