Indirect Cost Allocation: Direct Method

Charlie Manufacturing Company has two production departments, Melting and Molding. Direct general plant management and plant security costs benefit both production departments. Charlie allocates general plant management costs on the basis of the number of production employees and plant security costs on the basis of space occupied by the production departments. In November, the following overhead costs were recorded:

Melting Department direct overhead$ 350,000Molding Department direct overhead600,000General plant management180,000Plant security70,000

MeltingMoldingNumber of employees5090Space occupied (square feet)20,00080,000Machine hours10,0002,000Direct labor hours4,00020,000

(a) Prepare a schedule allocating general plant management costs and plant security costs to the Melting and Molding Departments. (Round your answer to the nearest whole number.Do not round until your final answer.)

DepartmentTotalMeltingMoldingGeneral Plant Management$Answer

Answer

General Plant manager Total: ? Melting ? Molding?

Plant security Toral? Melting? Molding ?

(b) Determine the total departmental overhead costs for the Melting and Molding Departments.

Melting ?

Molding ?

(c) Assuming the Melting Department uses machine hours and the Molding Department uses direct labor hours to apply overhead to production, calculate the overhead rate for each production department. (Round your answers to two decimal places.)

Melting ?

molding?