Question
The following budgeted information pertains to Olsen Company: Service Departments Producing Departments Human Resources Facilities Mixing Molding Direct department costs $80,000 $40,000 $280,000 $540,000 Direct
The following budgeted information pertains to Olsen Company:
Service Departments | Producing Departments | |||
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 |
The direct department costs for Mixing and Molding represent the direct department overhead costs of those departments, not including any direct material or direct labor. 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.
If the step method is used to allocate service departments to the producing departments, the total budgeted overhead for the Mixing Department after service department costs are allocated is:
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