The following is information for Silvertide, Inc: The company produces three products, $Z1,Z2,$ and $Z3.$

Actual cost driver activity levels for the month of January are as follows:

Compute the predetermined overhead rate for each activity.

Allocate overhead to the products.

Calculate the overhead cost per unit

Calculate the overhead cost per unit for each product

Cost Hierarchy. The following activities and costs are for Tanaka Company.

Direct materials used by workers to assemble products

Purchase requisitions issued for raw materials

Machines set up to produce groups of products

New product research and development

Maintenance performed on the factory building

Direct labor assembling products

Product designed for a specific customer

Factory building rent

Provide one example of an appropriate allocation base for each item. $($For instance, an

appropriate allocation base for item $1$ is the number of direct materials used.$)3.3.$ Journal Entry to Apply Overhead. Caspian Company is deciding which of three

approaches it should use to apply overhead to products.

One plantwide rate. The predetermined overhead rate is $150$ percent of direct labor

cost$.$

Department rates. Machining department uses a rate of $$55$ per machine hour, and the

Assembly department uses a rate of $$35$ per direct labor hour.

Activity$-$based rates. The rate for the three activities identified are:

Purchase Requisitions $$15$ per requisition

Setups $$50$ per setup

Quality Control $$70$ per inspection

a$.$ Using the plantwide method, calculate the amount of overhead applied and make the journal

entry. Direct labor costs totaled $$80,000.$

b$.$ Calculating MOH by department, calculate the overhead applied for machining & assembly

and make the journal entries. Machining used $1,000$ machine hours, and Assembly used $1,200$

direct labor hours.

c$.$ During the year, $900$ purchase requisitions were processed, $1,300$ production setups were

performed, and $400$ products were inspected. Using activity$-$based costing, calculate the

amount of overhead applied, and make the appropriate journal entry.

$4.$ Allocating Service Department Costs. Crandall Co$.$ has two production departments $($P$1$

and P$2)$ and three service departments $($HR$,$ IT$,$ and maintenance$).$ The $$400,000$ of HR costs

are allocated on the number of employees, the $$600,000$ of maintenance costs are allocated on

square footage and the $$300,000$ IT costs are allocated on hours of computer support used.

Production P$1,$ P$2,$ total

Numbers of employee $20,80,100$

Square feet occupied $3,000,6,000,9,000$

Computer support hours $10,000,15,00025,000$

a$.$ Calculate each of the service department costs allocated to each production department.

b$.$ What is the total amount of service costs allocated to each production department?