Question
Jacob Company has two support depts, Maintenance and Personnel and two line depts, X and Y. The cost driver in Maintenance is standard service hours
Jacob Company has two support depts, Maintenance and Personnel and two line depts, X and Y. The cost driver in Maintenance is standard service hours and directly-traced cost is $60,000. The cost driver in Personnel is number of employees and directly-traced cost is $9,000. Directly-traced cost in Depts X and Y is $18,000 and $30,000, respectively and the cost driver is direct labor hours. What is the overhead rate for Dept X? What is the overhead rate for Department Y?
maint | pers. | dept x | dpt y | |
service hours used | 100 | 50 | 300 | 150 |
employees | 5 | 10 | 45 | 45 |
DLH | 250 | 250 |
a. $120.00
b. $125.00
c. $250.00
d. $72.00
Work:
maint. | pers. | |
directly traced cost | 60,000 | 9,000 |
cost driver (300+150) | 450 | |
(45+45) | 90 | |
rate | $133.33 | $100 |
60,000/450 = 133.33
9,000/90 = 100
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