1. Theta Manufacturing Co.

Scenario: Overhead Allocation Based on Activity Drivers

Department Details:

• Department A:
  • Direct Costs: $500,000
  • Indirect Costs: $300,000
  • Allocation Base: Direct Labor Hours (DLH)
  • DLH Used: 25,000

• Department B:
  • Direct Costs: $450,000
  • Indirect Costs: $280,000
  • Allocation Base: Machine Hours (MH)
  • MH Used: 20,000

Requirements:

Allocate overhead costs to Department A and Department B using their respective allocation bases (DLH for A and MH for B). Present calculations and allocation tables