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
	General Factory	Receiving	Assembly	Finishing
Direct overhead	$400,000	$150,000	$45,000	$75,000
Square footage		2,700	5,400	5,400
Number of receiving orders	300		1,680	1,020
Direct labor hours			25,000	40,000

Required:

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 "0".) Allocation ratios: Square footage Number of receiving orders Allocations: Direct overhead cost General Factory Receiving Total General Factory General Factory Receiving Assembly Finishing = = Receiving Assembly 1000 1000 000 Finishing 1000 2. Using direct labor hours, compute departmental overhead rates. (Round to the nearest cent.) Overhead Rate Assembly Finishing per direct labor hour per direct labor hour