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Reciprocal Method Eilers Company has two producing departments and two support departments. The following budgeted data pertain to these four departments: Support Departments Producing Departments
Reciprocal Method
Eilers Company has two producing departments and two support departments. The following budgeted data pertain to these four departments:
Support Departments | Producing Departments | |||
General Factory | Receiving | Assembly | Finishing | |
Direct overhead | $500,000 | $150,000 | $42,000 | $71,000 |
Square footage | 2,700 | 5,400 | 5,400 | |
Number of receiving orders | 300 | 1,680 | 1,020 | |
Direct labor hours | 25,000 | 40,000 |
Required:
1. Allocate the overhead costs of the support departments to the producing departments using the reciprocal method. (Round allocation ratios to two decimal places. Round allocated costs to the nearest dollar. If an amount is zero, enter "0".)
Allocation ratios:
General Factory | Receiving | Assembly | Finishing | |
Square footage | ||||
Number of receiving orders |
Allocations:
General Factory | Receiving | Assembly | Finishing | |
Direct overhead cost | $ | $ | $ | $ |
General Factory | ||||
Receiving | ||||
Total | $ | $ | $ | $ |
2. Using direct labor hours, compute departmental overhead rates. (Round to the nearest cent.)
Overhead Rate | |
Assembly | $ per direct labor hour |
Finishing | $ per direct labor hour |
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