JYD Manufacturing Company has two production departments (Fabrication and Assembly) and three services departments (General Factory Administration, Factory Maintenance, and Factory Cafeteria). A summary of the year's overhead cost and other data for each department prior to allocation of service department costs appear below: Fabrication Assembly General Factory Administration Factory Maintenance Factory Cafeteria Overhead Costs $6,730,000 $4,850,000 $160,000 $203,200 $240,000 Direct Labor Costs 562,500 437,500 31,000 27,000 42,000 Number of Employees 280 200 12 8 20 Square Footage Occupied 88,000 72,000 1,750 2,000 4,800 The costs of the General Factory Administration, Factory Maintenance, and Factory Cafeteria are allocated on the basis of direct labor hours, square footage occupied, and the number of employees respectively. It is the company's policy that the order of distribution is based on the highest dollar amount of costs originating in the service departments and the direct method is used. Required: a. What is the total overhead cost allocated to the Fabrication Department? b. Assuming Assembly Department uses direct labor hours, what is the Factory Overhead rate of the Assembly Department?
JYD Manufacturing Company has two production departments (Fabrication and Assembly) and three services departments (General Factory Administration, Factory Maintenance, and Factory Cafeteria). A summary of the year's overhead cost and other data for each department prior to allocation of service department costs appear below: Fabrication Assembly General Factory Administration Factory Maintenance Factory Cafeteria Overhead Costs $6,730,000 $4,850,000 $160,000 $203,200 $240,000 Direct Labor Costs 562,500 437,500 31,000 27,000 42,000 Number of Employees 280 200 12 8 20 Square Footage Occupied 88,000 72,000 1,750 2,000 4,800 The costs of the General Factory Administration, Factory Maintenance, and Factory Cafeteria are allocated on the basis of direct labor hours, square footage occupied, and the number of employees respectively. It is the company's policy that the order of distribution is based on the highest dollar amount of costs originating in the service departments and the direct method is used. Required: a. What is the total overhead cost allocated to the Fabrication Department? b. Assuming Assembly Department uses direct labor hours, what is the Factory Overhead rate of the Assembly Department?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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JYD Manufacturing Company has two production departments (Fabrication and Assembly) and three services departments (General Factory Administration, Factory Maintenance, and Factory Cafeteria).
A summary of the year's
| Fabrication | Assembly | General Factory Administration | Factory Maintenance | Factory Cafeteria | |
| Overhead Costs | $6,730,000 | $4,850,000 | $160,000 | $203,200 | $240,000 |
| Direct Labor Costs | 562,500 | 437,500 | 31,000 | 27,000 | 42,000 |
| Number of Employees | 280 | 200 | 12 | 8 | 20 |
| Square Footage Occupied | 88,000 | 72,000 | 1,750 | 2,000 | 4,800 |
The costs of the General Factory Administration, Factory Maintenance, and Factory Cafeteria are allocated on the basis of direct labor hours, square footage occupied, and the number of employees respectively. It is the company's policy that the order of distribution is based on the highest dollar amount of costs originating in the service departments and the direct method is used.
Required:
a. What is the total overhead cost allocated to the Fabrication Department?
b. Assuming Assembly Department uses direct labor hours, what is the Factory Overhead rate of the Assembly Department?
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