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Service Departments Serv1 Producing Departments Beer-Making Wine Making Serv2 10 50 1,000 11 60 2,000 BUDGET Employees Floor space (sqm) IT assets Machine hours Direct

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Service Departments Serv1 Producing Departments Beer-Making Wine Making Serv2 10 50 1,000 11 60 2,000 BUDGET Employees Floor space (sqm) IT assets Machine hours Direct labour cost Direct material Department overhead Number of units of product 10 70 3,000 3,987 48,713 15,000 40,000 75,050 100 80 4,000 7,000 62,000 25,000 41,429 200,000 80,000 60,000 Allocation Base IT Assets Employees Machine hours Machine hours 15 1,050 50 16 2,050 60 ACTUAL Employees IT assets Floor space (sqm) Machine hours Direct labour cost Direct material Department overhead Number of units of product 15 3,050 80 3,550 27,050 10,050 30,050 100,050 105 4,050 70 7,050 57,050 20,050 40,050 200,050 Required: A Calculate the predetermined PLANTWIDE rate (1 mark) Use the Direct Labour Cost as the allocation base. B. Calculate the predetermined overhead rates for each Producing department using the DIRECT method (3 marks) C. Calculate the predetermined overhead rates for each Producing department using the STEP method (3 marks) Allocate Serv2 first D. Calculate the budgeted PER UNIT total cost for the BEER product using: (1) the PLANTWIDE method and (2) the DIRECT method (3 marks) The compamy only makes two products: beer and wine The Beer-Making production department only makes beer (while the Wine-Making production department only makes wine)

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