A4 Calculating Departmental Overhead Rates Using Post-Allocation CostsValron Company has two support departments, Human Resources and General Factory, and two producing departments, Fabricating and Assembly.SupportDepartmentsProducingDepartmentsDirect costsNormal activity:Number ofemployeesSquare footageHuman GeneralResources Factory$180,000 $400,000701,600Fabricating Assembly$114,200 $91,000701303,600The costs of the Human Resources Department are allocated on the basis of number of employees, and the costs of General Factory are allocated on the basis of square footage.Valron Company uses the direct method of support department cost allocation. Solve for the allocated costs to Fabricating and Assembly using the direct method of supportdepartment cost allocation. The Fabricating Department overhead rate is based on normal activity of 87,000 machine hours. The Assembly Department overhead rate is based onnormal activity of 180,000 direct labor hours.Job 316 required eight machine hours in Fabricating and five direct labor hours in Assembly. Total direct materials cost $140, and total direct labor cost was $90.Required:1. Calculate the overhead rate for Fabricating based on machine hours and the overhead rate for Assembly based on direct labor hours. If required, round your answers to thenearest cent. Use the rounded values for subsequent calculations.14,400 employeesSquare footage3,600The costs of the Human Resources Department are allocated on the basis of number of employees, and the costs of General Factory are allocated on the basis of square footage.Valron Company uses the direct method of support department cost allocation. Solve for the allocated costs to Fabricating and Assembly using the direct method of supportdepartment cost allocation. The Fabricating Department overhead rate is based on normal activity of 87,000 machine hours. The Assembly Department overhead rate is based onnormal activity of 180,000 direct labor hours.Job 316 required eight machine hours in Fabricating and five direct labor hours in Assembly. Total direct materials cost $140, and total direct labor cost was $90.Required:1,60014,4001. Calculate the overhead rate for Fabricating based on machine hours and the overhead rate for Assembly based on direct labor hours. If required, round your answers to thenearest cent. Use the rounded values for subsequent calculations.Overhead Rateper mach. hr.per DLHFabricating departmentAssembly department2. Using the overhead rates calculated in Requirement 1, calculate the cost of Job 316. If required, round your answer to the nearest cent.$3. What if Job 316 had required two machine hour in Fabricating and five direct labor hours in Assembly? Direct labor and direct materials costs remained the same. Calculate thenew cost of Job 316. If required, round your answer to the nearest cent.

Direct costs are the expenses that are directly used for the production of goods and services for…

Calculating Departmental Overhead Rates Using Post-Allocation Costs Valron Company has two support departments, Human Resources and General Factory, and two producing departments, Fabricating and Assembly. Support Producing Departments Departments Direct costs Normal activity: Number of employees Square footage Human General Resources Factory $180,000 $400,000 1,600 70 Fabricating Assembly $91,000 $114,200 70 3,600 14,400 The costs of the Human Resources Department are allocated on the basis of number of employees, and the costs of General Factory are allocated on the basis of square footage. Valron Company uses the direct method of support department cost allocation. Solve for the allocated costs to Fabricating and Assembly using the direct method of support department cost allocation. The Fabricating Department overhead rate is based on normal activity of 87,000 machine hours. The Assembly Department overhead rate is based on normal activity of 180,000 direct labor hours. Job 316 required eight machine hours in Fabricating and five direct labor hours in Assembly. Total direct materials cost $140, and total direct labor cost was $90. Required: 1. Calculate the overhead rate for Fabricating based on machine hours and the overhead rate for Assembly based on direct labor hours. If required, round your answers to the 130

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q