FSI Company allocates support department costs to production departments before establishing predetermined overhead rates for use in product costing.

EngSupport costs are allocated to productive departments based on time of service while IT costs are allocated based on IT hours.

DepartmentEngSupportITCuttingFinishingTotal

Departmental overhead$2,000,000$2,000,000$3,000,000$2,000,000$9,000,000

Time of service40506004501140

IT hours1,0002,00012,0008,00023,000

Cutting uses machine hours as a base for overhead allocation and expects to use100,000MH this year.

Finishing uses direct labor hours as a base for overhead allocation and expects to use150,000DLH this year.

During the year, Job 280 is completed. The job required:CuttingFinishing

DLH200300

MH400100

Required:

a.Do a cost allocation calculation/table using the step method to put all overhead amounts into the productive departments.

b.Calculate the predetermind overhead rates for the productive departments.

c.Calculate the total overhead applied to Job 280.