Plantwide versus Department Direct Method. Bristol company uses the direct method in distributing service department costs to producing departments. Costs of Department S1 are distributed on the basis of number of employees, while cost of Department S2 are distributed on the basis of machine hours. The allocation bases used in calculating predetermined overhead rate are machine hours in Department P1 and direct labor hours in Department P2 Have picture Required: 1. Calculate predetermined overhead rates for the producing departments and compute the resulting overhead cost of Job 437 2. Calculate a plantwide overhead rate based on direct labor hours and compute the resulting overhead cost of Job 437
Plantwide versus Department Direct Method. Bristol company uses the direct method in distributing service department costs to producing departments. Costs of Department S1 are distributed on the basis of number of employees, while cost of Department S2 are distributed on the basis of machine hours. The allocation bases used in calculating predetermined overhead rate are machine hours in Department P1 and direct labor hours in Department P2 Have picture Required: 1. Calculate predetermined overhead rates for the producing departments and compute the resulting overhead cost of Job 437 2. Calculate a plantwide overhead rate based on direct labor hours and compute the resulting overhead cost of Job 437
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Plantwide versus Department Direct Method. Bristol company uses the direct method in distributing service department costs to producing departments. Costs of Department S1 are distributed on the basis of number of employees, while cost of Department S2 are distributed on the basis of machine hours. The allocation bases used in calculating predetermined
Have picture
Required:
1. Calculate predetermined overhead rates for the producing departments and compute the resulting overhead cost of Job 437
2. Calculate a plantwide overhead rate based on direct labor hours and compute the resulting overhead cost of Job 437
Transcribed Image Text:Producing Department
Service Department
P 1
P 2
S 1
S 2
Budgeted Overhead
$410,000
$304,000
$100,000
$50,000
Number of employees
90
210
20
28
Machine hours
64,000
16,000
Direct labor hours
35,000
100,000
The following data pertain to Job 437:
Department P1
Department P 2
Materials cost
$90
$40
Direct labor hours
1
Machine hours
1
3.
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