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Ryvel Company has 2 (two) Production Departments, namely Department I and Department II. In addition, it has 2 (two) Supporting Departments, namely Department C and

Ryvel Company has 2 (two) Production Departments, namely Department I and Department II. In addition, it has 2 (two) Supporting Departments, namely Department C and Department D. Ryvel Company estimates the FOH cost for each department for the coming period as follows:

Production Department:

Department I : $300,000

Department II : $250,000

Support Department:

Department C : $270,000

Department D : $150,000

The allocation basis for calculating the overhead rate for Department I is machine hours, while Department II is direct labor hours. For Department C, the allocation is based on maximum no. of employee, while Department D is allocated based on kilowatt hours. Other data available in these 4 (four) departments are:

image

Requested:

Calculate the production department overhead rate if it is allocated from support department costs to production departments using:

a. direct method

b. Squential method

Production Department Support Department || II C D Machine hours 30.000 25.000 Direct labor hours 48.000 52.000 Square feet (m2) 100 115 45 55 KwH 25.000 15.000 9.500 17.000 Maintenance hours 75 120 35 55 Max. No of employee 70 110 145 100

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SureI can help you with that a Direct Method In the direct methodthe overhead costs of the support departments are allocated directly to the production departments based on the chosen allocation base ... blur-text-image
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