Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

I am unsure why my answer is marked incorrect. Also, can you please help me with the step-down method and reciprocal method? Thank you so

I am unsure why my answer is marked incorrect. Also, can you please help me with the step-down method and reciprocal method? Thank you so much!

image text in transcribedimage text in transcribedimage text in transcribed
Required information [The following information applies to the questions displayed below] Celestial Artistry Company is developing departmental overhead rates based on direct-labor hours for its two production departments, Etching and Finishing. The Etching Department employs 20 people and the Finishing Department employs 80 people. Each person in these two departments works 2,000 hours per year. The production-related overhead costs for the Etching Department are budgeted at $200,000, and the Finishing Department costs are budgeted at $320,000. Two service departments, Maintenance and Computing, directly support the two production departments. These service departments have budgeted costs of $48,000 and $250,000, respectively. The production departments' overhead rates cannot be determined until the service departments' costs are allocated. The following schedule reflects the use of the Maintenance Department's and Computing Department's output by the various departments. Using Department Service Department Maintenance Computing Etching Finishing Maintenance (maintenance hours) 0 1,000 1,000 8,000 Computing (minutes) 240,000 0 840,000 120,000 Required: 1-a. Use the direct method to allocate service department costs. 1-b. Calculate the overhead rates per direct-labor hour for the Etching Department and the Finishing Department. a Answer is complete but not entirely correct. Complete this question by entering your answers in the tabs below. Req 1A Req 1B Use the direct method to allocate service department costs. (Do not round intermediate calculations. Round your nal answers to the nearest dollar amount.) Costs allocated to Etching $ 424,083 0 Costs allocated to Finishing 393,917 0 Total costs to be allocated $ 818,000 Req 13 > 2. Use the step-down method to allocate service department costs. Allocate the Computing Department's costs rst. Calculate the overhead rates per direct-labor hour for the Etching Department and the Finishing Department. (Do not round intermediate calculations. Round "Overhead rate per hour" to 3 decimal places and other answers to the nearest dollar amount.) Costs prior to allocation Allocation of Computing Department costs Overhead costs traceable to production departments Total overhead cost Direct-labor hours (DLH) Overhead rate per hour

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Accounting Tools For Business Decision Making

Authors: Paul D. Kimmel,  Jerry J. Weygandt,  Jill E. Mitchell

8th Edition

1119791057, 978-1119791058

More Books

Students also viewed these Accounting questions

Question

5. Give some examples of hidden knowledge.

Answered: 1 week ago