Three Company uses a process organized into two service or support departments (Support 1 and Support 2) and two producing departments (Production 1 and Production

Question

86 users unlocked this solution today!

Three Company uses a process organized into two service or support departments (Support 1 and Support 2) and two producing departments (Production 1 and Production 2).Budgeted data for the four departments for the month of January are as follows.

Support Departments

Producing Departments

Support 1

Support 2

Production 1

Production 2

Overhead

$100,000

$268,000

$174,000

$126,000

Number of employees

200

400

400

Machine hours

1,000

3,000

1,000

Overhead cost for the Support 1 Department is allocated based on number of employees.Overhead cost for the Support 2 Department is allocated based on machine hours.

Note: Round all calculations to two decimal points.Round all dollar amounts to the nearest dollar.

Determine the total overhead cost for Production 1 using the reciprocal method to allocate service department costs.

Note: Give your answer using dollar signs and commas but not decimal points (cents).