Jasmine Company manufactures both pesticide and liquid fertilizer, with each product manufac- tured in separate departments....
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Jasmine Company manufactures both pesticide and liquid fertilizer, with each product manufac- tured in separate departments. Three support departments support the production departments: Power, General Factory, and Purchasing. Budgeted data on the five departments are as follows: Support Departments Power General Factory Purchasing Producing Departments Pesticide Liquid Fertilizer Overhead $90,000 $314,000 $167,000 $78,900 $107,800 Square feet 1,500 1,500 4,200 4,800 Machine hours Purchase orders 20 1,403 40 1,345 7 24,000 120 8,000 60 The company does not break overhead into fixed and variable components. The bases for alloca- tion 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. (Take allocation ratios out to four significant digits. Round allocated costs to the nearest dollar.) 2. Using machine hours, compute departmental overhead rates. (Round the overhead rates to the nearest cent.) Jasmine Company manufactures both pesticide and liquid fertilizer, with each product manufac- tured in separate departments. Three support departments support the production departments: Power, General Factory, and Purchasing. Budgeted data on the five departments are as follows: Support Departments Power General Factory Purchasing Producing Departments Pesticide Liquid Fertilizer Overhead $90,000 $314,000 $167,000 $78,900 $107,800 Square feet 1,500 1,500 4,200 4,800 Machine hours Purchase orders 20 1,403 40 1,345 7 24,000 120 8,000 60 The company does not break overhead into fixed and variable components. The bases for alloca- tion 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. (Take allocation ratios out to four significant digits. Round allocated costs to the nearest dollar.) 2. Using machine hours, compute departmental overhead rates. (Round the overhead rates to the nearest cent.)
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Answer 1 To allocate the overhead costs to the producing departments using the direct method we need to calculate the allocation ratios for each suppo... View the full answer
Related Book For
Cornerstones of Cost Management
ISBN: 978-1285751788
3rd edition
Authors: Don R. Hansen, Maryanne M. Mowen
Posted Date:
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