Required information

Exercise $7-25($Algo$)$ Selection of an Allocation Base $[$LO $7-1,7-3]$

Skip to question

$[$The following information applies to the questions displayed below.$]$

Great Ape Glassworks manufactures glass used for the screens on smartphones. It has two producing departments, P$1$ and P$2,$ and only one service department, S$1.$ The company is able to track overhead to the various departments but wants to allocate the service department costs to the producing departments. However, the company is not sure which of the multiple allocation bases should be selected. The data it collected appear$$in the table below.

DepartmentOverhead AssignedP$1$$ $178,500$P$2292,750$S$193,000$

Potential allocation baseP$1$P$2$Employee headcount$6020$Space used $($in square feet$)6,0009,000$Productive capacity $($in units$)28,800115,2003-$year average percentage of S$1$ output used$60\%40\%$

Exercise $7-25($Algo$)$ Part $1$: Determine the total estimated overhead cost for each of the producing departments after allocating the cost of the service department

Required:

$1.$Determine the total estimated overhead cost for each of the producing departments after allocating the cost of the service department: