EX.07.22

Reciprocal Method Eilers Company has two producing departments and two support departments. The following budgeted data pertain to these four departments: Support Departments Producing Departments Assembly Finishing Receiving General Factory $400,000 Direct overhead $160,000 $43,000 $74,000 2,700 5,400 5,400 Square footage Number of receiving orders 300 1,680 1,020 40,000 Direct labor hours 25.000 Required: 1. Allocate the overhead costs of the support departments to the producing departments using the reciprocal method. (Round allocation ratios to two decimal places. Round allocated costs to the nearest dollar. If an amount is zero, enter "o".) Allocation ratios: General Factory Receiving Assembly Finishing Square footage Number of receiving orders Allocations: General Factory Receiving Assembly Finishing Direct overheud cost General Factory Receiving Total 2. Using direct labor hours, compute departmental overheed rates. (Round to the nearest cent.) Overhead Rate per direct labor hour Assembly Finishing per direct labor hour