The following departmental information is for the four departments at Samoa Industries. Departmental Total Cost Cost Driver Square Feet Number of Employees Janitorial $150,000 Cafeteria 50,000 Cutting 1,125,000 Assembly 1,100,000 Square footage serviced a. Cutting Department b. Assembly Department Number of employees % 200 % 20,000 4,000 16,000 40 The Janitorial and Cafeteria departments are support departments. Determine the proportional (percentage) usage of the Janitorial Department by the (a) Cutting and (b) Assembly departments using the direct method. 40 12 120

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Overheads

In cost accounting, overhead refers to those expenses which occur during the operating of a business. Overhead includes the fixed, variable, or semi-variable which is not directly involved with a company product or service. It is very important to analyze overhead expense as it helps the company in determining how much a company must charge for its products and services so that they can generate profit.  Overhead expenses depend upon the nature of the business operations.