Question
''Ortiz SRL'' is a company divided into three departments. It uses a cost system for work orders and for the calculation of the distribution of
''Ortiz SRL'' is a company divided into three departments. It uses a cost system for work orders and for the calculation of the distribution of indirect costs it uses the departmental method, for this it uses the following criteria:
-Department of cut: Proportional to the hours of labor - Welding department: Proportional to the cost of direct labor - Painting Department: Proportional to the cost of materials
- Labour Hours = 12,000.
This is the information corresponding to the production of the year 2022:
Budget of materials to be used: Cutting $35,500,000.00 Welding $20,500,000.00 Painting $22,300,000.00 Budget of labor to be employed: Cutting $5,700,000.00 Welding $3,780,000.00 Painting $4,600,000.00 Direct Labor Hours Budget: Cutting $7,500.00 Welding $6,300.00 Painting $15,000.00
Indirect cost budget: Cutting $8,750,000.00 Welding $4,370,800.00 Painting $12,150,000.00
Calculate the predetermined indirect cost allocation rates for the year 2022, for each of the departments.
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