Question: Beckers Corp, is determining the overhead for its two production departments, Molding and Assembly. The Molding Department worked 20,000 direct labor hours for the period
Beckers Corp, is determining the overhead for its two production departments, Molding and Assembly. The Molding Department worked 20,000 direct labor hours for the period just ended, and the Assembly Department worked 40,000 hours. The direct overhead costs incurred by Molding and Assembly were $302,500 and $881,500, respectively. Two service departments, Repair and Power, directly support the two production departments. These service departments have costs of $180,000 and $500,000, respectively. The following schedule reflects the use of Repair and Power's output by the various departments: Required (20 points): Round to the nearest dollar. 1) What is the most appropriate driver for the repair department? The power department? 2) Allocate the company's service department costs to production departments by using the step method. Begin with the department with the greatest amount of cost. NOTE: IF you are unsure about the step method, you may elect to complete the problem using the direct method for a maximum of 17 points. Do not do both - you don't have time. No extra credit will be awarded for this
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