The Pineapple Pen Company is divided into two operating divisions: pens and pencils. The company allocates the cost of the cafeteria and the maintenance department to each operating division using the direct method. Cafeteria costs are allocated on the basis of the number of employees in each department, and maintenance department costs on the basis of the number of square metres. Support department cost allocations using the direct method are based on the following data:

	Support departments		Producing departments
	Cafeteria	Maintenance	Pens	Pencils
Overhead costs	1,050,000	875,000	1,800,000	2,225,500
# of employees	15	25	60	100
Square metres	15,000	5,000	100,000	125,000
Direct labour hours	-	-	108,000	135,000

Required:

Calculate the allocation ratios for the cafeteria and maintenance department. (Carry these calculations out to four significant digits.) Enter your answers as decimal values.

Cafeteria
Maintenance

2. Allocate the support service costs to the producing departments. Use a minus sign to indicate a subtraction. For those boxes in which no entry is required, leave the box blank or enter zero ("0").

Support Departments

Producing Departments

Cafeteria

Maintenance

Pencils

Pens

Total

Department Costs

Allocations

Cafeteria Costs

Maintenance Costs

Total Overhead Costs

3. Assume departmental overhead rates are based on direct labour hours. Calculate the overhead rate for the pen division and for the pencil division. (Round overhead rates to the nearest cent.)

Pens

Pencils