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Matthew Stike, the new controller of Central Manufacturing Company (CMC) believes that the company should use the dual rate method of allocating overhead costs of
Matthew Stike, the new controller of Central Manufacturing Company (CMC) believes that the company should use the dual rate method of allocating overhead costs of its Materials Management Department to its Machining and Assembly Departments instead of the single rate method, which the company has used since its inception 20 years ago. Stike's Materials Management Department has an annual capacity of 6,500 labor-hours and a budgeted fixed cost of $286,000. The budgeted variable cost per labor-hour of the Materials Management Department is $17. Stike gathers the following information: (Click the icon to view the information.) \begin{tabular}{cccc} & MachiningDepartment & AssemblyDepartment & Total \\ \hline Budgeted usage of Materials & 1,200 & 4,000 & 5,200 \\ Management labor-hours & & & \\ Actual usage of Materials & 1,100 & 3,800 & 4,900 \\ Management labor-hours & & & \end{tabular} Requirement 1. Using the single-rate method, allocate Materials Management Department costs to the Machining and Assembly Departments in these three ways. Start with allocating (a), then (b), and finally (c). (Round the budgeted rate per item to the nearest cent.)
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