Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Maricopa Corporation is developing departmental overhead rates based on direct labor hours for its two production departments, Molding and Assembly. The molding department employs 20

image text in transcribed

Maricopa Corporation is developing departmental overhead rates based on direct labor hours for its two production departments, Molding and Assembly. The molding department employs 20 people, and the assembly department employs 80 people. Each person in these two departments works 2,000 hours per year. The production-related overhead costs for the molding department are budgeted at $200,000, and the assembly department costs are budgeted at $320,000. Two support departments; Repair and Power, directly support the two production departments and have budgeted costs of $48,000 and $250,000, respectively. The production departments' overhead rates cannot be determined until the support departments' costs are properly allocated. The following schedule reflects the use of the repair departments and power department's output by the various departments. Repair hours Kilowatt-hours Repair NA 240,000 Power 1,000 NA Molding 1,000 840,000 Assembly 8,000 120,000 Required: 1. Calculate the overhead rates per direct labor hour for the molding department and the assembly department using the step-down method to charge support department costs to each other and to the production departments. The allocation policy is firstly allocate the service department with the highest percentage of interdepartmental support.(10 points) 2. Calculate the overhead rates per direct labor hour for the molding department and the assembly department using the reciprocal method to charge support department costs to each other and to the production departments. (10 points)

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

Step: 3

blur-text-image

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

Governmental Accounting

Authors: Steven M. Bragg

2022nd Edition

1642210781, 978-1642210781

More Books

Students also viewed these Accounting questions

Question

How can you listen critically to others public speeches?

Answered: 1 week ago