Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Rabia Company has two support departments, Human Resources and Maintenance, and two producing departments, Fabrication and Assembly Support Departments Producing Departments Human Resources Maintenance Fabrication
Rabia Company has two support departments, Human Resources and Maintenance, and two producing departments, Fabrication and Assembly Support Departments Producing Departments Human Resources Maintenance Fabrication Assembly Budgeted overhead Direct labor hours $40,000 2,000 $72,000 $140,000 $160,000 2,500 8,000 10,000 Machine hours - - 12,000 8,000 Number of employees 4 5 15 25 The company only had mixed cost. Human Resource costs are allocated based on the number of employees, and maintenance costs are allocated based on machine hours. Predetermined overhead rates for fabrication and assembly are based on direct labor hours. Required: 1. Calculate the allocation ratios. 2. Using the direct method, allocate the costs of the Human Resources and Maintenance departments to the Fabrication and Assembly departments. Also write the final cost of both the production departments. 3. What if the Maintenance Department had 50 employees? How would that affect the allocation of Human Resources Department costs to the Fabrication and Assembly departments
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started