Reciprocal Method

Eilers Company has two producing departments and two support departments. The following budgeted data pertain to these four departments:

Support DepartmentsProducing DepartmentsGeneral FactoryReceivingAssemblyFinishingDirect overhead$$400,000$ $$150,000$ $$42,000$$$71,000$Square footage$2,7005,4005,400$Number of receiving orders$3001,6801,020$Direct labor hours$25,00040,000$

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 $"0".)$

Allocation ratios:

General Factory Receiving Assembly Finishing

Square footage

Number of receiving orders

Allocations:

General FactoryReceivingAssemblyFinishing

Direct overhead cost$

General Factory:

Receiving:

Total: Reciprocal Method

Eilers Company has two producing departments and two support departments. The following budgeted data pertain to these four departments:

Required: amount is zero, enter $"0".)$

Allocation ratios:

Allocations:

$2.$ Using direct labor hours, compute departmental overhead rates. $($Round to the nearest cent.$)$

Overhead Rate

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Check My Work

$1.$ Support department costs must be allocated to the producing departments so that the producing departments can calculate their overhead rates.

$2.$ Total costs per dept. $/$ total labor hours per dept.