SICH 1) 2) 3) 4) Assign overhead costs to department cost pools Select an allocation base for each department Compute overhead allocation rates for each department Use the departmental overhead rates to assign overhead costs to cost objects Total overhead costs Department 1 Department 2 Department 3 18,000,000 17,000,000 (35,000,000) Management needs to determine breakout Total Labor Hours Used Per Unit Department 1 No. of Products Labor Hours Total Depart 1 Hours Total Depart 2 Hours Total Depart 2 Hours per Unit Department 2 Labor Hours per product 2 8 11 Department 2 Labor Hours per product 14 5 20 Product 1 Product 2 Product 3 1,500 25,000 15,000 4 12 7 1 2 3 4 Department 1 Overhead rate 5 Department 2 Overhead Rate 06 Departmetn 3 Overhead Rate Unit Total Labor Hours Required Product 1 Product 2 Product 3 Number of Units 1,500 25,000 15,000 Direct Labor Hours per unit 20.00 25.00 38.00 Budgeted Costs Indirect labor costs Single Plant Wide Overhead Rate Per direct labor hour 40,375,482 Overhead per unit Factory utiliites Factory Insurance Misic indirect expenses 10,000,000 2,000,000 15,000,000 Product 1 Product 2 Product Activity Rate 15 16 Activity Rate Expected Activity 17 Activity Cost Pool Activity Driver Level 18 Craftsmanship Direct Labor 300,000 19 Set-up Batches 20,000 20 Design Modification Designs 100,000 21 Plant Services Square Footage 150,000 22 23 Activity Level per Product Overhead Cost Assigned to Pool 20,000,000 10,000,000 7,375,482 30,000,000 per DEH per batch per design per Ft 24 25 Craftsmanship 26 Set-up 27 Design Modification 28 Plant Services 29 Product 1 150,000 10,000 30 000 15,000 Product 2 100,000 2,500 50,000 55,000 Product 3 50,000 7,500 20,000 80,000 Total Activity Level 300,000 20,000 100,000 150,000 Total Activity Cost Assigned Product 1 Product 2 Product 3 30 31 Craftsmanship 32 Set-up 33 Design Modification 34 Plant Services 59 36 Total Costs Assigned SICH 1) 2) 3) 4) Assign overhead costs to department cost pools Select an allocation base for each department Compute overhead allocation rates for each department Use the departmental overhead rates to assign overhead costs to cost objects Total overhead costs Department 1 Department 2 Department 3 18,000,000 17,000,000 (35,000,000) Management needs to determine breakout Total Labor Hours Used Per Unit Department 1 No. of Products Labor Hours Total Depart 1 Hours Total Depart 2 Hours Total Depart 2 Hours per Unit Department 2 Labor Hours per product 2 8 11 Department 2 Labor Hours per product 14 5 20 Product 1 Product 2 Product 3 1,500 25,000 15,000 4 12 7 1 2 3 4 Department 1 Overhead rate 5 Department 2 Overhead Rate 06 Departmetn 3 Overhead Rate Unit Total Labor Hours Required Product 1 Product 2 Product 3 Number of Units 1,500 25,000 15,000 Direct Labor Hours per unit 20.00 25.00 38.00 Budgeted Costs Indirect labor costs Single Plant Wide Overhead Rate Per direct labor hour 40,375,482 Overhead per unit Factory utiliites Factory Insurance Misic indirect expenses 10,000,000 2,000,000 15,000,000 Product 1 Product 2 Product Activity Rate 15 16 Activity Rate Expected Activity 17 Activity Cost Pool Activity Driver Level 18 Craftsmanship Direct Labor 300,000 19 Set-up Batches 20,000 20 Design Modification Designs 100,000 21 Plant Services Square Footage 150,000 22 23 Activity Level per Product Overhead Cost Assigned to Pool 20,000,000 10,000,000 7,375,482 30,000,000 per DEH per batch per design per Ft 24 25 Craftsmanship 26 Set-up 27 Design Modification 28 Plant Services 29 Product 1 150,000 10,000 30 000 15,000 Product 2 100,000 2,500 50,000 55,000 Product 3 50,000 7,500 20,000 80,000 Total Activity Level 300,000 20,000 100,000 150,000 Total Activity Cost Assigned Product 1 Product 2 Product 3 30 31 Craftsmanship 32 Set-up 33 Design Modification 34 Plant Services 59 36 Total Costs Assigned