The Meteor Corporation is divided into service and producing departments. The Maintenance department serves the other departments in proportion to the area occupied by each department: Department Square Feet Warehousing 10,500 Cutting 17,500 Sewing 14,000 Finishing 28,000 The Warehousing department expenses are allocated to the producing departments on the basis of the number of stores requisitions filled. Department Requisitions Cutting 3,920 Sewing 5,880 Finishing 4,200 The totals of the departmental overhead budgets are as follows: Department Estimated overhead Maintenance P 48,000 Warehousing 28,400 Cutting 64,632 Sewing 78,848 Finishing 39,420 Other information: Basis Cutting Sewing Finishing Direct labor costs P24,125 P 75,860 P 64,425 Direct labor hours 16,000 25,850 18,000 Machine hours 6,200 6,800 7,000 REQUIRED: Prepare a worksheet showing overhead application rate for each of the three producing departments if Cutting uses direct labor costs; Sewing, direct labor hours; and Finishing, machine hours.
Exercise 5 - 5. APPLIED
The Meteor Corporation is divided into service and producing departments. The Maintenance
department serves the other departments in proportion to the area occupied by each
department:
Department Square Feet
Warehousing 10,500
Cutting 17,500
Sewing 14,000
Finishing 28,000
The Warehousing department expenses are allocated to the producing departments on the basis
of the number of stores requisitions filled.
Department Requisitions
Cutting 3,920
Sewing 5,880
Finishing 4,200
The totals of the departmental overhead budgets are as follows:
Department Estimated overhead
Maintenance P 48,000
Warehousing 28,400
Cutting 64,632
Sewing 78,848
Finishing 39,420
Other information:
Basis Cutting Sewing Finishing
Direct labor costs P24,125 P 75,860 P 64,425
Direct labor hours 16,000 25,850 18,000
Machine hours 6,200 6,800 7,000
REQUIRED:
Prepare a worksheet showing overhead application rate for each of the three
producing departments if Cutting uses direct labor costs; Sewing, direct labor hours; and Finishing, machine hours.
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