Support Departments	Producing Departments
	Personnel	Maintenance	Fabrication	Assembly
Budgeted overhead	$160,000	$288,000	$560,000	$640,000
Direct labor hours	8,000	10,000	32,000	40,000
Machine hours	12,000	15,000	48,000	32,000
Number of employees	16	20	60	100

The company does not divide costs into fixed and variable components. Personnel costs are allocated based on the number of employees, and maintenance costs are allocated based on machine hours.

Predetermined overhead rates for fabrication and assembly are based on direct labor hours. (Round to the nearest dollar).

If the direct method is used to allocate support department costs, the predetermined overhead rate for the Fabrication Department would be (round to two decimal places)

Total cost allocated to Fab dept:

Maintenance = 48,000/80,000 x $288,000 = $172,800

Personnel = 60/160 x $160,000 = $60,000

Total OH (Fab) = $560,000 + $172,800 + $60,000 = $792,800

MOH rate = $792,800/32,000 DLH = $24.78

1) why are we using those figures and not the others?

2) why did they use machine hours with maintenance and number of employees with personnel?