Question 1 4 pts The Santana Company uses normal costing. The company has one service department (M) and two production departments (P1 and P2). The service department allocates costs to P1 and P2 using machine hours in those departments. The service department charges variable costs and fixed costs separately. Both of the production departments use direct labor hours to compute their predetermined overhead rates. The budgeted costs in Department M for 2020 are $56,000 variable and $128,000 fixed. Data for the production departments for 2020 are shown below: Department P1 Department P2 Budgeted machine hours 27,000 hours 5,000 hours Long-run average machine hours 30,000 hours 10,000 hours Budgeted departmental overhead cost $226,750 $75,250 Budgeted direct labor hours 50,000 hours 20,000 hours The production department overhead amounts above do NOT include service cost allocations. Compute the predetermined overhead rate in P1 for 2020. Please show all of your work. Question 2 4 pts Refer to question 1. The actual overhead incurred in Department M during 2020 was $54,000 in variable costs and $120,000 in fixed costs. There were 26,000 actual machine hours and 48,000 actual direct labor hours in Department P1 during 2020. There were 4,000 actual machine hours and 19,000 actual direct labor hours in Department P2 during 2020. The actual overhead incurred in the production departments (before service cost allocations) was $325,000 for Department P1 and $110,200 in Department P2. Compute the total underallocated or overallocated overhead for Department P1 for the year 2020. Please show all of your work. Question 3 2 pts The Def Leppard Company has 2 service departments (A and B) and two production departments (P1 and P2). Department A allocates service costs using machine hours. Department B allocates costs using kilowatt hours. Variable costs are $60,000 in Department A and $40,000 in Department B. For the most recent period, there are 2,000 machine hours in Department A, 4,000 in Department B, 6,000 in Department P1 and 10,000 in Department P2. For the most recent period, there are 1,500 kilowatt hours in Department A, 500 in Department B, 3,000 in Department P1 and 5,500 in Department P2. If the company outsourced Department B, how many kilowatt hours would the company have to purchase from an outside supplier? Question 4 2 pts Refer to question 3. If all of the costs in question 3 are variable costs, as given, compute the relevant internal cost of keeping Department B rather than outsourcing it. In other words, how much internal cost could we save if we outsourced Department B? Do not put a dollar sign in your
