If the company uses the direct method of service department cost distribution,how much will the Machinery Department apply as factory overhead if it uses13,500 direct labor hours?Deang Corporation has two service departments and three producing departments. Thefollowing were gathered from their operations:Service DepartmentsP500,000540,000MaintenanceStoreroomProducing Departments1,200,0001,784,000|872,000|MachineryAssemblyPackagingA factory survey revealed the following:Maintenance Number of DirectRequisitions LaborHoursDepartmentsServicesMaintenance400Storeroom14%MachineryAssemblyPackaging32%3,50026%28%20,00036,00018,000|6,0004,100|The costs of the maintenance department are allocated on the basis of percent of servicesrendered while the costs of the Storeroom department are allocated based on number ofrequisitions.

Solution: Cost of maintenance allocated to machinery = P500,000*32/86 = P186,047 Cost of storeroom…

Answered: If the company uses the direct method…

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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Finest vent Industial Inc. consists of two production departments (Assembly and Machining) and two service departments (Maintenance and Store). The estimated overhead costs and other relevant information for the respective departments are as follows: Assembly Machining Maintenance Store Estimated overhead costs $95,000 $82,000 $46,000 $30,000 Direct labour hours Machine hours 10,000 2,000 5,000 30,000 It has been estimated that each service department does work for other cost centres in the following proportions: Total labour hours used by departments Assembly Machining Maintenance Store Maintenance to Store to 50% 60% 50% 30% 10% Required: (Show all workings clearly and round all solutions to 2 decimal places) (a) Calculate the total overhead costs for the Machining and Assembly departments after the re-apportionment of the costs from the service departments. (b) Calculate the department overhead rates for the Machining and Assembly departments using the appropriate bases.
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Please show your solution in excel form. Thank you
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