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The following budgeted information pertains to Olsen Company: Human Resources Facilities Mixing Molding Direct department costs $80,000 $40,000 $280,000 $540,000 Direct labor hours 5,000 3,000

The following budgeted information pertains to Olsen Company:

Human

Resources

Facilities

Mixing

Molding

Direct department costs

$80,000

$40,000

$280,000

$540,000

Direct labor hours

5,000

3,000

9,000

27,000

Square footage

2,000

3,000

10,500

17,500

# of Employees

4

5

11

9

Mixing and Molding are the production departments. Human Resource Department costs are assigned to other departments based on the number of employees, and Facilities Department costs are assigned to other departments based on square footage occupied. Direct department costs include raw materials, direct labor, and overhead other than the human resources and facilities costs.

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Using the direct method, assign the service department costs to the production departments ndicate the fractions/percentages you used to allocate each of the service departments. Label the final cost for the production departments carefully.

B. Once the service department costs are allocated to the production departments, predetermined application rates are set for the two production departments using direct labor hours as the cost driver. Calculate those two predetermined overhead rates using the cost totals you calculated in the previous question.

C.

An order of 100 units of product has been completed accumulating the following costs:

Direct labor cost $12 per hour

Direct Labor Hours 20 min. per unit in Mixing; 1 hour per unit in Molding

Calculate the total non-direct cost of this completed order.

Remember to use the predetermined rates that you calculated in the previous question.

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