The following raw data are presented for the Andro Company:

Budget Allocations:

Budgeted: Maint: Engin: Admin: A: B:

DVOH $80,000 $60,000 $40,000 $75,000 $60,000

Work orders 2,500 0 0 1,400 1,100

Reports 160 0 100 60

Files 250 140 110

DLHs 300,000 200,000

DFOH $40,000 $60,000 $25,000 $125,000 $140,000

Capacity:

Work orders 3,000 0 0 1,800 1,200

Reports 200 0 120 80

Files 300 175 125

Use the above data to prepare a formal worksheet for distribution to the departments to document your calculation of both the VOH and FOH PORs for the two production departments of the Ravelle Company. PORs are all based on DLH. Allocate the variable service department costs using a budgeted rate for each service based on budgeted cost of the service and budgeted demand. Base the FOH allocations on the maximum resource that could be consumed, in other words, the relative size ratios. Use the step method of allocation with Maintenance first.

Prepare the cost matrix you would invert to prepare a reciprocal solution for VOH.