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Direct Method and Overhead Rates Jasmine Company manufactures both shampoo and conditioner, with each product manufactured in separate departments. Three support departments support the production departments: Power General Factory, and Purchasing. Budgeted data on the five departments are as follows: Overhead Square feet Machine hours 20 40 7 Support Departments Producing Departments General Power Factory Purchasing Shampoo Conditioner $80,000 $316,000 $169,000 $78,800 $107,700 3,000 3,000 9,600 8,400 1,403 1,345 8,000 24,000 Purchase orders 60 The company does not break overhead into fixed and variable components. The bases for allocation are power-machine hours, general factory-square feet; and purchasing-purchase orders. Required: 1. Allocate the overhead costs to the producing departments using the direct method. If required, round your allocation ratios to four decimal places and round allocated costs to the nearest dollar and use the rounded values for the subsequent calculations. Cost assignment: 120 Shampoo Conditioner Direct costs 78,800 107,700 Power 42,664 X 37,336 X General Factory 79,000 x 237,000 X Purchasing 56,328 112,672 Total 256,792 X 494,708 X Required: 1. Allocate the overhead costs to the producing departments using the direct method. If required, round your allocation ratios to four decimal places and round allocated costs to the nearest dollar and use the rounded values for the subsequent calculations. Cost assignment: Shampoo Conditioner Direct costs 78,800 107,700 Power 42,664 X 37,336 x General Factory 79,000 X 237,000 x Purchasing 56,328 112,672 Total 256,792 X 494,708 x 2. Using machine hours, compute departmental overhead rates. (Round the overhead rates to the nearest cent.) Departmental overhead rates Shampoo 32.10 x per machine hour Conditioner 20.61 X per machine hour Feedback Check My Work 1. Allocation Allocation ratio x Budgeted support service costs. 2. Overhead rate is computed by adding the allocated service costs to the overhead costs that are directly traceable to the producing department and dividing this total by some measure of activity, such as direct labor hours or machine hours