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Problem 4 Smithson Manufacturing Company has two production departments, Depo A and Depo B. Each department has its own separate factory overhead costs, which are:
Problem 4 Smithson Manufacturing Company has two production departments, Depo A and Depo B. Each department has its own separate factory overhead costs, which are: - Depo A factory overhead =$500,000 - Depo B-factory overhead =$400,000 In addition to their specific departmental factory overhead, the departments both benefit from plantwide services of the company. The cost of these general plantwide services are categorized as: - General Plant Management Services =$200,000 - Plant Safety and Security Services =$100,000. In determining individual department costs, Martha George, the company cost accountant, allocates General Plant Management Services costs t Depo A and Depo B on the basis of the number of production employees of each and she allocates Plant Safety and Security Services costs to the departments on the basis of the space occupied by the Depo A and Depo B. Nther Pertinent Nata. Required a. Prepare a schedule allocating General Plant Management Services costs and Plant Safety and Security costs to Depo A and Depo B. b. Determine the total departmental overhead costs for Depo A and for Depo B. c. Assuming that, for Depo A, Martha George for uses machine hours and, for Depo B, she uses direct labor hours, determine, i.e., calculate, the overhead allocation rates for each department. d. In January of the following fiscal year, Product A requires 520 machine hours and 410 direct labor hours. Required: Assuming the company applies overhead to production based on your computations above, determine the amount of overhead that would be allocated to Product A from Depo A and from Depo B
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