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Tempest Industries has two service departments (General Factory and Human Resources) and two production departments (Machining and Assembly). The company uses the direct method of

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Tempest Industries has two service departments (General Factory and Human Resources) and two production departments (Machining and Assembly). The company uses the direct method of service-department cost allocation, allocating General Factory cost on the basis of square feet and Human Resources cost on the basis of employees. Budgeted allocation-base and operating data for the four departments follow. Square feet Employees Machine hours Labor hours General Human Factory Resources Machining 8, 2004 4,200 , 200 96,000 62 42 180 320 --- 68,000 46,200 26,200 112,000 Assembly 36,000 240 21,200 90,000 Additional information: Budgeted costs of General Factory and Human Resources respectively amount to $1,680,000 and $1,070,000. The anticipated overhead costs incurred directly in the Machining and Assembly Departments respectively total $3,770,000 and $2,460,000. The manufacturing overhead application bases used by Tempest's production departments are: Machining, machine hours; Assembly, labor hours. Company policy holds that a department's overhead application rate is based on a department's own overhead plus an allocated share of service-department cost. Required: A. Allocate the company's service-department costs to the producing departments. B. Compute the overhead application rates for Machining and Assembly

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