Allocating Service Department Costs: Allocation Basis Alternatives

Weld$-$Rite Fabricators has two producing departments, P$1$ and P$2,$ and one service department, S$1.$

Estimated directed overhead costs per month are as follows:

P$1$ $$240,000$

P$2400,000$

S$1145,600$

Other data follow:

P$1$ P$2$

Numbers of employees $15050$

Production capacity $($units$)100,00060,000$

Space occupied $($square feet$)5,00015,000$

Five$-$year average of S$1\text{'}$s service output used $65\%35\%$

For each of the following allocation bases, determine the total estimated overhead cost for P$1$ and P$2$ after allocating S$1$ cost to the producing departments.

P$1$ P$2$

$1.$ Based on number of employees Answer

Answer

$2.$ Production capacity in units Answer

Answer

$3.$ Space occupied Answer

Answer

$4.$ Five$-$year average of S$1$ service used Answer

Answer

$5.$ Estimated direct overhead costs Answer

Answer