Direct Method and Overhead Rates Belami Company manufactures both shampoo and conditioner, with each product manufactured in separate departments. Three support departments support the production departments: Power, General Factory, and Purchasing. Budgeted data on the five departments are as follows: Overhead Square feet Machine hours Purchase orders Square feet Machine hours Purchase orders Cost assignment: Direct costs Power General Factory Purchasing Power $94,000 3,000 Total Support Departments 20 Shampoo s General Factory Shampoo $430,000 1,403 40 Purchasing $150,000 The company does not break overhead into fixed and variable components. The bases for allocation are power-machine hours; general factory-square feet; and purchasing-purchase orders. 3,000 Required: 1. Allocate the overhead costs to the producing departments using the direct method. If required, round your allocation ratios to four decimal places and round allocated costs to the nearest dollar and us the rounded values for the subsequent calculations. Allocation ratios: Conditioner 1,345 Conditioner 7 Producing Departments Shampoo Conditioner $146,000 $170,000 8,400 24,000 9,600 8,000 60 120

Direct Method and Overhead Rates Belami Company manufactures both shampoo and conditioner, with each product manufactured in separate departments. Three support departments support the production departments: Power, General Factory, and Purchasing. Budgeted data on the five departments are as follows: Overhead Square feet Machine hours Purchase orders Square feet Machine hours Purchase orders Cost assignment: Direct costs Power General Factory Purchasing Power $94,000 3,000 Total Support Departments 20 Shampoo s General Factory Shampoo $430,000 1,403 40 Purchasing $150,000 The company does not break overhead into fixed and variable components. The bases for allocation are power-machine hours; general factory-square feet; and purchasing-purchase orders. 3,000 Required: 1. Allocate the overhead costs to the producing departments using the direct method. If required, round your allocation ratios to four decimal places and round allocated costs to the nearest dollar and us the rounded values for the subsequent calculations. Allocation ratios: Conditioner 1,345 Conditioner 7 Producing Departments Shampoo Conditioner $146,000 $170,000 8,400 24,000 9,600 8,000 60 120

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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