Smart Corporation has 2 (two) Supporting Departments, namely the Maintenance Department and the Warehouse Department, as well as 2 (two) Production Departments, namely the Cutting Department and the Assembly Department. The Maintenance Department is allocated based on the number of employees (no of employee), while the Warehouse Department is allocated based on (square meters). The Operations Department FOH rate can be determined after the overhead costs in the Support Department have been allocated, the Cutting Department and the Assembly Department are allocated based on machine hours (Machine Hours).

Requested:

Calculate the production department overhead rate if it is allocated from the support department costs to the production department using the Algebraic Method!

FOH cost before Allocation No of Employee Square meters Machine hours Support Department Production Department maintenance warehouse cutting assembly $80.000 $55.000 $120.000 $195.000 400 370 200 480 7.000 3.000 14.000 15.000 75.000 150.000