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Overhead Allocation Based on Activity Drivers Department Details: Department A: Direct Costs: $700,000 Indirect Costs: $400,000 Allocation Base: Direct Labor Hours (DLH) DLH Used: 35,000

Overhead Allocation Based on Activity Drivers

Department Details:

  • Department A:
    • Direct Costs: $700,000
    • Indirect Costs: $400,000
    • Allocation Base: Direct Labor Hours (DLH)
    • DLH Used: 35,000
  • Department B:
    • Direct Costs: $650,000
    • Indirect Costs: $350,000
    • Allocation Base: Machine Hours (MH)
    • MH Used: 30,000

Requirements:

  • Allocate overhead costs to Department A and Department B using their respective allocation bases.
  • Calculate the total cost for each department.
  • Present the overhead allocation in a table format.
  • Analyze the impact of overhead allocation on departmental performance.

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