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Indirect Cost Allocation: Direct Method Charlie Manufacturing Company has two production departments, Melting and Molding. Direct general plant management and plant security costs benefit both

Indirect Cost Allocation: Direct Method Charlie Manufacturing Company has two production departments, Melting and Molding. Direct general plant management and plant security costs benefit both production departments. Charlie allocates general plant management costs on the basis of the number of production employees and plant security costs on the basis of space occupied by the production departments using the direct method of overhead allocation. In November, the following overhead costs were recorded:

Melting Department overhead $ 500,000
Molding Department overhead 400,000
General plant management 200,000
Plant security 100,000

Other pertinent data follow:

Melting Molding
Number of employees 60 40
Space occupied (square feet) 20,000 80,000
Machine hours 1,056 3,200
Direct labor hours 10,560 7,200

(a) Prepare a schedule allocating general plant management costs and plant security costs to the Melting and Molding Departments.

Department Total Melting Molding
General Plant Management Answer Answer Answer
Plant security Answer Answer Answer

(b) Determine the total departmental overhead costs for the Melting and Molding Departments. Melting $Answer Molding $Answer (c) Assuming the Melting Department uses machine hours and the Molding Department uses direct labor hours to apply overhead to production, calculate the overhead rate for each production department.

Note: Round final answers to two decimal places. Melting $Answer Molding $Answer

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