Travelcraft, Inc., manufactures a complete line of fiberglass suitcases and attach cases. The firm has three manufacturing departments: Molding, Component, and Assembly. There are also two service departments: Power and Maintenance.

The sides of the cases are manufactured in the Molding Department. The frames, hinges, and locks are manufactured in the Component Department. The cases are completed in the Assembly Department. Varying amounts of materials, time, and effort are required for each of the cases. The Power Department and Maintenance Department provide services to the three manufacturing departments.

Travelcraft has always used a plantwide overhead rate. Direct-labor hours are used to assign overhead to products. The predetermined overhead rate is calculated by dividing the company's total estimated overhead by the total estimated direct-labor hours to be worked in the three manufacturing departments.

Karen Mason, director of cost management, has recommended that Travelcraft use departmental overhead rates. The planned operating costs and expected levels of activity for the coming year have been developed by Mason and are presented by department in the following schedules.(All numbers are in thousands.)

	Manufacturing Departments
	Molding	Component	Assembly
Department activity measures:
Direct-labor hours		500			2,000		1,500
Machine hours		875			125		0
Departmental costs:
Direct material	$	24,800	$	60,000	$	2,500
Direct labor		7,000		40,000		24,000
Variable overhead		7,000		20,000		33,000
Fixed overhead		35,000		12,400		12,200
Total departmental costs	$	73,800	$	132,400	$	71,700
Use of service departments:
Maintenance:
Estimated usage in labor hours for the coming year		90			25		10
Power (in kilowatt-hours):
Estimated usage for the coming year		360			320		120
Maximum allotted capacity		500			350		150

	Service Departments
	Power	Maintenance
Departmental activity measures:
Maximum capacity		1,000	kilowatt-hours	Adjustable
Estimated usage for the coming year		800	kilowatt-hours		125	hours
Departmental costs:
Materials and supplies	$	10,000		$	3,000
Variable labor		2,800			4,500
Fixed overhead		24,000			500
Total service department costs	$	36,800		$	8,000

2.

Karen Mason has been asked to develop departmental overhead rates for comparison with the plantwide rate. The following steps are to be followed in developing the departmental rates.(Do not round intermediate calculations. Enter all your answers in thousands except "Departmental overhead rate" which should be entered in dollars rounded to 2 decimal places.)

a.	The Maintenance Department costs should be allocated to the three manufacturing departments using the direct method. (Need answers)
b.	The Power Department costs should be allocated to the three manufacturing departments using dual cost allocation combined with the direct method. Fixed costs are to be allocated according to maximum allotted capacity, and variable costs are to be allocated according to planned usage for the coming year. (Need answer)

	molding	compnent
Departmental overhead costs	$42,000	$32,400	$45,200
a.Allocation of maintenance costs (direct method)
b.Allocation of power costs (dual, direct method)
Fixed costs
Variable costs
Total allocated departmental overhead costs	$	$	$
c.	Cost driver	875	MH	2,000	DLH	1,500	DLH
Departmental overhead rate	$74.88	per MH	$23.76	per DLH	$34.24	per DLH