Using the direct method, compute for the factory overhead rate of the D department if it apply overhead based on direct labor hours and budgeted direct labor hours for the period total to 75,000 hours. Sylvie Corporation has three production departments: K, D, and C. It also has two service departments Administration and Personnel. Administration costs are allocated based on value of assets employed, and Personnel costs are allocated based on number of employees. Assume that Administration provides more service to the other departments than does the Personnel Department. Department Administration Direct Costs Employees Asset Value 900,000 1,200,000 600,000 300,000 1,600,000 1,800,000 700,000 1,400,000 400,000 50 20 Personnel K 30 D 10 500,000 20
Using the direct method, compute for the factory overhead rate of the D department if it apply overhead based on direct labor hours and budgeted direct labor hours for the period total to 75,000 hours. Sylvie Corporation has three production departments: K, D, and C. It also has two service departments Administration and Personnel. Administration costs are allocated based on value of assets employed, and Personnel costs are allocated based on number of employees. Assume that Administration provides more service to the other departments than does the Personnel Department. Department Administration Direct Costs Employees Asset Value 900,000 1,200,000 600,000 300,000 1,600,000 1,800,000 700,000 1,400,000 400,000 50 20 Personnel K 30 D 10 500,000 20
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Transcribed Image Text:Using the direct method, compute for the
factory overhead rate of the D
department if it apply overhead based on
direct labor hours and budgeted direct
labor hours for the period total to 75,000
hours.
Sylvie Corporation has three production departments: K, D. and C. It also has two service
departments: Administration and Personnel. Administration costs are allocated based on value of
assets employed, and Personnel costs are allocated based on mumber of employees. Assume that
Administration provides more service to the other departments than does the Personnel
Department.
Department
Administration
Direct Costs Employees Asset Value
50
20
1,800,000
700,000
1,400,000
400,000
500,000
900,000
1,200,000
600,000
300,000
1,600,000
Personnel
30
10
K
D.
C.
20
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