Chapter 7, Problem 23E

Refer to the data in Exercise 7.22. The company has decided to simplify its method of allocating support service costs by switching to the direct method.

Required:

1. 1. Allocate the costs of the support departments to the producing departments using the direct method. (Round allocation ratios to four significant digits. Round allocated costs to the nearest dollar.)
2. 2. Using direct labor hours, compute departmental overhead rates. (Round to the nearest cent.)