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Ford Motor Company operates three manufacturing departments: Engine Assembly, Body Shop, and Paint Shop. The total overhead costs for the year are $1,000,000. The allocation
Ford Motor Company operates three manufacturing departments: Engine Assembly, Body Shop, and Paint Shop. The total overhead costs for the year are $1,000,000. The allocation bases for each department are as follows:
Department | Allocation Base | Percentage of Total Allocation Base |
Engine Assembly | Direct labor hours | 40% |
Body Shop | Machine hours | 30% |
Paint Shop | Square footage of production area | 30% |
Calculate the overhead allocation for each department.
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